Lowe's Companies (LOW) Marked As Today's Roof Leaker Stock
Trade-Ideas LLC identified
(
) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Lowe's Companies as such a stock due to the following factors:
- LOW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $305.1 million.
- LOW has traded 652,421 shares today.
- LOW is trading at 2.41 times the normal volume for the stock at this time of day.
- LOW crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.
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More details on LOW:
Lowe's Companies, Inc. operates as a home improvement retailer. The company offers products for maintenance, repair, remodeling, and home decorating. The stock currently has a dividend yield of 1.6%. LOW has a PE ratio of 24. Currently there are 14 analysts that rate Lowe's Companies a buy, no analysts rate it a sell, and 5 rate it a hold.
The average volume for Lowe's Companies has been 4.8 million shares per day over the past 30 days. Lowe's Companies has a market cap of $66.7 billion and is part of the services sector and retail industry. The stock has a beta of 0.95 and a short float of 1.2% with 2.67 days to cover. Shares are up 5.7% year-to-date as of the close of trading on Thursday.
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Analysis:
rates Lowe's Companies as a
. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, increase in net income, revenue growth and notable return on equity. We feel its 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:
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 29.22% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, LOW should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- LOWE'S COMPANIES INC has improved earnings per share by 15.4% 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, LOWE'S COMPANIES INC increased its bottom line by earning $2.70 versus $2.13 in the prior year. This year, the market expects an improvement in earnings ($3.29 versus $2.70).
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Specialty Retail industry average. The net income increased by 8.4% when compared to the same quarter one year prior, going from $1,039.00 million to $1,126.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.1%. Since the same quarter one year prior, revenues slightly increased by 4.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to other companies in the Specialty Retail industry and the overall market on the basis of return on equity, LOWE'S COMPANIES INC has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
- You can view the full Lowe's Companies Ratings Report.
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