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Trade-Ideas: Equinix (EQIX) Is Today's "Water-Logged And Getting Wetter" Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Equinix ( EQIX) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Equinix as such a stock due to the following factors:

  • EQIX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $117.2 million.
  • EQIX has traded 814,154 shares today.
  • EQIX traded in a range 244.4% of the normal price range with a price range of $8.24.
  • EQIX traded below its daily resistance level (quality: 18 days, meaning that the stock is crossing a resistance level set by the last 18 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on EQIX:

Equinix, Inc. provides data center services to protect and connect the information assets for the enterprises, financial services companies, and content and network providers primarily in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. EQIX has a PE ratio of 128.8. Currently there are 14 analysts that rate Equinix a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Equinix has been 1.1 million shares per day over the past 30 days. Equinix has a market cap of $8.8 billion and is part of the technology sector and internet industry. The stock has a beta of 0.99 and a short float of 26% with 18.54 days to cover. Shares are down 13.8% year to date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Equinix as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good.

Highlights from the ratings report include:

  • Since the same quarter one year prior, revenues rose by 15.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Despite the current debt-to-equity ratio of 1.71, it is still below the industry average, suggesting that this level of debt is acceptable within the Internet Software & Services industry. Despite the fact that EQIX's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.75 is high and demonstrates strong liquidity.
  • The net income has significantly decreased by 178.6% when compared to the same quarter one year ago, falling from $36.45 million to -$28.66 million.
  • EQUINIX INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, EQUINIX INC increased its bottom line by earning $2.66 versus $1.71 in the prior year. For the next year, the market is expecting a contraction of 45.1% in earnings ($1.46 versus $2.66).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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