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Pre-Market Activity Shows Heavy Volume And Movement For McDermott International (MDR)

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

  • MDR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $30.6 million.
  • MDR traded 2.4 million shares today in the pre-market hours as of 8:05 AM, representing 57.6% of its average daily volume.

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More details on MDR:

McDermott International, Inc. operates as an engineering, procurement, construction, and installation (EPCI) company worldwide. The company operates in three segments: Asia Pacific, Atlantic, and the Middle East. It focuses on designing and executing complex offshore oil and gas projects. Currently there are 2 analysts that rate McDermott International a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for McDermott International has been 3.9 million shares per day over the past 30 days. McDermott International has a market cap of $2.0 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.82 and a short float of 17.6% with 8.59 days to cover.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates McDermott International as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, 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 Energy Equipment & Services industry. The net income has significantly decreased by 226.6% when compared to the same quarter one year ago, falling from $50.61 million to -$64.07 million.
  • 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 Energy Equipment & Services industry and the overall market, MCDERMOTT INTL INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for MCDERMOTT INTL INC is currently extremely low, coming in at 3.09%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -9.32% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$71.63 million or 487.97% 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 34.37%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 228.57% 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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