Storm The Castle: Weatherford International (WFT)
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 Weatherford International (WFT) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Weatherford International as such a stock due to the following factors:
- WFT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $154.5 million.
- WFT has traded 9.1 million shares today.
- WFT is trading at 3.52 times the normal volume for the stock at this time of day.
- WFT crossed above its 200-day simple moving average.
'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. 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 on. 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.EXCLUSIVE OFFER: Get the inside scoop on opportunities in WFT with the Ticky from Trade-Ideas. See the FREE profile for WFT NOW at Trade-IdeasMore details on WFT: Weatherford International Ltd. provides equipment and services used in the drilling, evaluation, completion, production, and intervention of oil and natural gas wells worldwide. Currently there are 10 analysts that rate Weatherford International a buy, no analysts rate it a sell, and 7 rate it a hold.The average volume for Weatherford International has been 7.3 million shares per day over the past 30 days. Weatherford International has a market cap of $10.7 billion and is part of the basic materials sector and energy industry. The stock has a beta of 2.19 and a short float of 1.6% with 1.16 days to cover. Shares are down 6.8% year-to-date as of the close of trading on Wednesday.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 Weatherford International as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and poor profit margins.Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.1%. Since the same quarter one year prior, revenues slightly increased by 0.0%. 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.
- Net operating cash flow has increased to $326.00 million or 41.12% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 14.25%.
- The debt-to-equity ratio of 1.09 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, WFT maintains a poor quick ratio of 0.70, which illustrates the inability to avoid short-term cash problems.
- The gross profit margin for WEATHERFORD INTERNATIONAL is currently lower than what is desirable, coming in at 29.74%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.57% significantly trails the industry average.
- You can view the full Weatherford International Ratings Report.
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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