Advanced Drainage Systems (WMS) Weak On High Volume - TheStreet

Trade-Ideas LLC identified

Advanced Drainage Systems

(

WMS

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Advanced Drainage Systems as such a stock due to the following factors:

  • WMS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.0 million.
  • WMS has traded 106,425 shares today.
  • WMS is trading at 5.86 times the normal volume for the stock at this time of day.
  • WMS is trading at a new low 7.06% 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 WMS:

Advanced Drainage Systems, Inc. designs, manufactures, and markets thermoplastic corrugated pipes and related water management products for non-residential, residential, agriculture, and infrastructure applications in the United States and internationally. The stock currently has a dividend yield of 0.7%. WMS has a PE ratio of 118. Currently there are 3 analysts that rate Advanced Drainage Systems a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Advanced Drainage Systems has been 294,000 shares per day over the past 30 days. Advanced Drainage Systems has a market cap of $1.6 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 2.05 and a short float of 11.4% with 8.59 days to cover. Shares are up 38% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Advanced Drainage Systems as a

hold

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:

  • Powered by its strong earnings growth of 42.42% and other important driving factors, this stock has surged by 31.51% over the past year, outperforming the rise in the S&P 500 Index during the same period.
  • WMS's revenue growth has slightly outpaced the industry average of 5.6%. Since the same quarter one year prior, revenues rose by 14.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • In comparison to the other companies in the Building Products industry and the overall market, ADVANCED DRAINAGE SYSTEMS's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Even though the current debt-to-equity ratio is 1.21, it is still below the industry average, suggesting that this level of debt is acceptable within the Building Products industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.92 is weak.
  • The gross profit margin for ADVANCED DRAINAGE SYSTEMS is rather low; currently it is at 17.04%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -4.82% is significantly below that of the industry average.

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