Ternium (TX) Showing Signs Of Being Strong And Under The Radar

Trade-Ideas LLC identified Ternium ( TX) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Ternium as such a stock due to the following factors:

  • TX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.2 million.
  • TX has traded 216.79099999999999681676854379475116729736328125 options contracts today.
  • TX is making at least a new 3-day high.
  • TX has a PE ratio of 15.
  • TX is mentioned 0.52 times per day on StockTwits.
  • TX has not yet been mentioned on StockTwits today.
  • TX is currently in the upper 20% of its 1-year range.
  • TX is in the upper 35% of its 20-day range.
  • TX is in the upper 45% of its 5-day range.
  • TX is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on TX:

Ternium S.A. manufactures and processes various steel products in Mexico, Argentina, Bolivia, Chile, Paraguay, Uruguay, the United States, Central America, Colombia, and internationally. It operates through two segments, Steel and Mining. The stock currently has a dividend yield of 4.2%. TX has a PE ratio of 15. Currently there are 3 analysts that rate Ternium a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Ternium has been 422,600 shares per day over the past 30 days. Ternium has a market cap of $4.3 billion and is part of the basic materials sector and metals & mining industry. Shares are up 71% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Ternium as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins.

Highlights from the ratings report include:
  • Powered by its strong earnings growth of 37.14% and other important driving factors, this stock has surged by 38.77% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • TERNIUM SA -ADR has improved earnings per share by 37.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, TERNIUM SA -ADR turned its bottom line around by earning $0.05 versus -$1.01 in the prior year. This year, the market expects an improvement in earnings ($2.11 versus $0.05).
  • The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that TX's debt-to-equity ratio is low, the quick ratio, which is currently 0.60, displays a potential problem in covering short-term cash needs.
  • The gross profit margin for TERNIUM SA -ADR is currently lower than what is desirable, coming in at 27.59%. Regardless of TX's low profit margin, it has managed to increase from the same period last year.
  • Net operating cash flow has decreased to $237.42 million or 26.67% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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