Covanta (CVA) Flagged As Strong On High Volume - TheStreet

Trade-Ideas LLC identified

Covanta

(

CVA

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

  • CVA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $20.2 million.
  • CVA has traded 121,581 shares today.
  • CVA is trading at 5.64 times the normal volume for the stock at this time of day.
  • CVA is trading at a new high 7.11% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 CVA:

Covanta Holding Corporation provides waste and energy services to municipal entities primarily worldwide. It owns and operates infrastructure for the conversion of waste to energy, as well as engages in other waste disposal and renewable energy production businesses. The stock currently has a dividend yield of 5.9%. Currently there are 7 analysts that rate Covanta a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Covanta has been 899,600 shares per day over the past 30 days. Covanta has a market cap of $2.3 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 0.40 and a short float of 7.5% with 7.56 days to cover. Shares are down 24% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Covanta as a

hold

. The company's strongest point has been its a solid financial position based on a variety of debt and liquidity measures that we have looked at. 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:

  • CVA, with its decline in revenue, slightly underperformed the industry average of 5.4%. Since the same quarter one year prior, revenues slightly dropped by 5.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • COVANTA HOLDING CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, COVANTA HOLDING CORP swung to a loss, reporting -$0.02 versus $0.35 in the prior year. This year, the market expects an improvement in earnings ($0.22 versus -$0.02).
  • The share price of COVANTA HOLDING CORP has not done very well: it is down 17.18% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier 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.
  • Net operating cash flow has significantly decreased to -$11.00 million or 127.50% 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 Commercial Services & Supplies industry. The net income has significantly decreased by 220.0% when compared to the same quarter one year ago, falling from $5.00 million to -$6.00 million.

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