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United Rentals (URI) Is Water-Logged And Getting Wetter Today

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 United Rentals ( URI) 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 United Rentals as such a stock due to the following factors:

  • URI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $126.9 million.
  • URI has traded 1.7 million shares today.
  • URI traded in a range 200.6% of the normal price range with a price range of $5.26.
  • URI traded below its daily resistance level (quality: 38 days, meaning that the stock is crossing a resistance level set by the last 38 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 URI:

United Rentals, Inc., through its subsidiaries, operates as an equipment rental company. It operates in two segments, General Rentals; and Trench Safety, Power and HVAC (heating, ventilating and air conditioning). URI has a PE ratio of 25.2. Currently there are 9 analysts that rate United Rentals a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for United Rentals has been 1.7 million shares per day over the past 30 days. United Rentals has a market cap of $9.1 billion and is part of the services sector and diversified services industry. The stock has a beta of 2.32 and a short float of 9.3% with 4.90 days to cover. Shares are up 17.9% 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 United Rentals as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • URI's revenue growth has slightly outpaced the industry average of 6.4%. Since the same quarter one year prior, revenues slightly increased by 7.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 227.50% and other important driving factors, this stock has surged by 84.56% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • UNITED RENTALS INC reported significant earnings per share improvement 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 two years. We feel that this trend should continue. During the past fiscal year, UNITED RENTALS INC increased its bottom line by earning $3.63 versus $0.64 in the prior year. This year, the market expects an improvement in earnings ($6.10 versus $3.63).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Trading Companies & Distributors industry. The net income increased by 241.5% when compared to the same quarter one year prior, rising from $41.00 million to $140.00 million.
  • The gross profit margin for UNITED RENTALS INC is rather high; currently it is at 59.79%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 10.46% is above that of the industry average.

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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