Philip Morris International (PM) Showing Signs Of Being Water-Logged And Getting Wetter
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
(
) 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 Philip Morris International as such a stock due to the following factors:
- PM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $348.8 million.
- PM has traded 3.0 million shares today.
- PM traded in a range 213.7% of the normal price range with a price range of $1.90.
- PM traded below its daily resistance level (quality: 397 days, meaning that the stock is crossing a resistance level set by the last 397 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 PM:
Philip Morris International Inc., through its subsidiaries, manufactures and sells cigarettes, other tobacco products, and other nicotine-containing products. The stock currently has a dividend yield of 5%. PM has a PE ratio of 16.9. Currently there are 6 analysts that rate Philip Morris International a buy, 1 analyst rates it a sell, and 3 rate it a hold.
The average volume for Philip Morris International has been 5.1 million shares per day over the past 30 days. Philip Morris International has a market cap of $124.5 billion and is part of the consumer goods sector and tobacco industry. The stock has a beta of 1.04 and a short float of 0.6% with 1.99 days to cover. Shares are down 2.7% year-to-date as of the close of trading on Tuesday.
Analysis:
rates Philip Morris International as a
. The company's strengths can be seen in multiple areas, such as its expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, weak operating cash flow and deteriorating net income.
Highlights from the ratings report include:
- Despite the weak revenue results, PM has outperformed against the industry average of 23.2%. Since the same quarter one year prior, revenues slightly dropped by 7.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for PHILIP MORRIS INTERNATIONAL is rather high; currently it is at 66.25%. Regardless of PM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PM's net profit margin of 22.39% compares favorably to the industry average.
- In its most recent trading session, PM has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- PHILIP MORRIS INTERNATIONAL's earnings per share declined by 16.9% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, PHILIP MORRIS INTERNATIONAL reported lower earnings of $4.76 versus $5.26 in the prior year. For the next year, the market is expecting a contraction of 9.4% in earnings ($4.31 versus $4.76).
- Net operating cash flow has decreased to $1,354.00 million or 41.63% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full Philip Morris International Ratings Report.
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