Trade-Ideas: Unisys (UIS) Is Today's "Perilous Reversal" Stock
Trade-Ideas LLC identified
(
) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Unisys as such a stock due to the following factors:
- UIS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.5 million.
- UIS has traded 51,283 shares today.
- UIS is down 4% today.
- UIS was up 26.3% yesterday.
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More details on UIS:
Unisys Corporation provides information technology services worldwide. It operates through two segments, Services and Technology. The Services segment provides cloud and infrastructure services, application services, and business process outsourcing services. Currently there are 2 analysts that rate Unisys a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for Unisys has been 720,300 shares per day over the past 30 days. Unisys has a market cap of $385.9 million and is part of the technology sector and computer software & services industry. The stock has a beta of 1.34 and a short float of 22.4% with 6.34 days to cover. Shares are down 28.1% year-to-date as of the close of trading on Tuesday.
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Analysis:
rates Unisys as a
. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- The gross profit margin for UNISYS CORP is currently lower than what is desirable, coming in at 27.24%. Regardless of UIS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, UIS's net profit margin of 2.88% is significantly lower than the industry average.
- UIS's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 51.97%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.7%. Since the same quarter one year prior, revenues slightly dropped by 2.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- UNISYS CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, UNISYS CORP swung to a loss, reporting -$2.21 versus $0.80 in the prior year. This year, the market expects an improvement in earnings (-$0.95 versus -$2.21).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 137.1% when compared to the same quarter one year prior, rising from -$58.20 million to $21.60 million.
- You can view the full Unisys Ratings Report.
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