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Alcatel-Lucent (ALU) Moving On Heavy Pre-Market Trading

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 Alcatel-Lucent ( ALU) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Alcatel-Lucent as such a stock due to the following factors:

  • ALU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $73.5 million.
  • ALU traded 2.0 million shares today in the pre-market hours as of 8:32 AM, representing 10.4% of its average daily volume.

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More details on ALU:

Alcatel-Lucent provides networking and communications technology, products, and services to service providers, enterprises, and governments worldwide. The stock currently has a dividend yield of 5.3%. Currently there are 2 analysts that rate Alcatel-Lucent a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for Alcatel-Lucent has been 23.0 million shares per day over the past 30 days. Alcatel-Lucent has a market cap of $9.5 billion and is part of the technology sector and telecommunications industry. Shares are up 189.9% year to date as of the close of trading on Monday.

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 Alcatel-Lucent as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk and disappointing return on equity.

Highlights from the ratings report include:

  • The debt-to-equity ratio is very high at 3.98 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, ALU maintains a poor quick ratio of 0.92, which illustrates the inability to avoid short-term cash problems.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Communications Equipment industry and the overall market, ALCATEL-LUCENT's return on equity significantly trails that of both the industry average and the S&P 500.
  • ALCATEL-LUCENT has improved earnings per share by 31.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ALCATEL-LUCENT swung to a loss, reporting -$1.45 versus $0.37 in the prior year. This year, the market expects an improvement in earnings (-$0.63 versus -$1.45).
  • The net income growth from the same quarter one year ago has exceeded that of the Communications Equipment industry average, but is less than that of the S&P 500. The net income increased by 17.9% when compared to the same quarter one year prior, going from -$408.82 million to -$335.70 million.
  • Net operating cash flow has increased to -$150.95 million or 48.56% when compared to the same quarter last year. Despite an increase in cash flow, ALCATEL-LUCENT's average is still marginally south of the industry average growth rate of 49.40%.

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