Harsco (HSC) Stock: Weak On High Volume Today

Trade-Ideas LLC identified Harsco ( HSC) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Harsco as such a stock due to the following factors:

  • HSC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.7 million.
  • HSC has traded 231,697 shares today.
  • HSC is trading at 2.35 times the normal volume for the stock at this time of day.
  • HSC is trading at a new low 3.15% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on HSC:

Harsco Corporation provides industrial services and engineered products worldwide. The company operates through three segments: Harsco Metals and Minerals, Harsco Rail, and Harsco Industrial. The stock currently has a dividend yield of 3%. Currently there are 2 analysts that rate Harsco a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Harsco has been 849,800 shares per day over the past 30 days. Harsco has a market cap of $724.9 million and is part of the basic materials sector and metals & mining industry. The stock has a beta of 2.98 and a short float of 1.6% with 1.06 days to cover. Shares are up 25% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Harsco as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Machinery industry. The net income has significantly decreased by 171.2% when compared to the same quarter one year ago, falling from $15.26 million to -$10.87 million.
  • The debt-to-equity ratio is very high at 3.15 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, HSC has a quick ratio of 0.68, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Machinery industry and the overall market, HARSCO CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$2.98 million or 128.40% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 44.72%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 165.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.

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