Water-Logged And Getting Wetter: Verizon Communications (VZ)
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 Verizon Communications as such a stock due to the following factors:
- VZ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $630.2 million.
- VZ has traded 6.3 million shares today.
- VZ traded in a range 231% of the normal price range with a price range of $1.47.
- VZ traded below its daily resistance level (quality: 27 days, meaning that the stock is crossing a resistance level set by the last 27 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.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in VZ with the Ticky from Trade-Ideas. See the FREE profile for VZ NOW at Trade-Ideas
More details on VZ:
Verizon Communications Inc., through its subsidiaries, provides communications, information, and entertainment products and services to consumers, businesses, and governmental agencies worldwide. The stock currently has a dividend yield of 4%. VZ has a PE ratio of 13. Currently there are 10 analysts that rate Verizon Communications a buy, 1 analyst rates it a sell, and 13 rate it a hold.
The average volume for Verizon Communications has been 13.1 million shares per day over the past 30 days. Verizon has a market cap of $228.7 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 0.51 and a short float of 0.9% with 3.60 days to cover. Shares are up 20.9% year-to-date as of the close of trading on Monday.
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.
Analysis:
rates Verizon Communications as a
. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, expanding profit margins, growth in earnings per share and increase in net income. 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:
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- VZ's revenue growth trails the industry average of 19.7%. Since the same quarter one year prior, revenues slightly increased by 0.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The gross profit margin for VERIZON COMMUNICATIONS INC is rather high; currently it is at 60.80%. Regardless of VZ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, VZ's net profit margin of 13.39% compares favorably to the industry average.
- VERIZON COMMUNICATIONS INC's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, VERIZON COMMUNICATIONS INC increased its bottom line by earning $4.37 versus $2.51 in the prior year. For the next year, the market is expecting a contraction of 11.0% in earnings ($3.89 versus $4.37).
- The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Diversified Telecommunication Services industry average. The net income increased by 2.1% when compared to the same quarter one year prior, going from $4,219.00 million to $4,310.00 million.
- You can view the full Verizon Communications Ratings Report.
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.