XPO Logistics (XPO) Highlighted As Weak On High Volume
Trade-Ideas LLC identified
(
) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified XPO Logistics as such a stock due to the following factors:
- XPO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $56.6 million.
- XPO has traded 72,437 shares today.
- XPO is trading at 2.36 times the normal volume for the stock at this time of day.
- XPO is trading at a new low 4.02% below yesterday's close.
'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.
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More details on XPO:
XPO Logistics, Inc. provides transportation and logistics services primarily in the United States. Currently there are 13 analysts that rate XPO Logistics a buy, 1 analyst rates it a sell, and none rate it a hold.
The average volume for XPO Logistics has been 1.4 million shares per day over the past 30 days. XPO Logistics has a market cap of $3.0 billion and is part of the services sector and transportation industry. The stock has a beta of 2.72 and a short float of 28.3% with 8.58 days to cover. Shares are down 1.3% year-to-date as of the close of trading on Friday.
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Analysis:
rates XPO Logistics as a
. Among the primary strengths of the company is its robust revenue growth -- not just in the most recent periods but in previous quarters as well. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
Highlights from the ratings report include:
- XPO's very impressive revenue growth greatly exceeded the industry average of 5.6%. Since the same quarter one year prior, revenues leaped by 404.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- XPO LOGISTICS INC's earnings per share declined by 10.5% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, XPO LOGISTICS INC reported poor results of -$2.60 versus -$1.98 in the prior year. This year, the market expects an improvement in earnings ($0.74 versus -$2.60).
- Looking at the price performance of XPO's shares over the past 12 months, there is not much good news to report: the stock is down 41.88%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- Net operating cash flow has significantly decreased to $6.90 million or 85.41% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Air Freight & Logistics industry. The net income has significantly decreased by 56.3% when compared to the same quarter one year ago, falling from -$14.40 million to -$22.50 million.
- You can view the full XPO Logistics Ratings Report.
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