Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified

National Oilwell Varco

(

NOV

) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified National Oilwell Varco as such a stock due to the following factors:

  • NOV has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $285.9 million.
  • NOV traded 12,326 shares today in the pre-market hours as of 9:24 AM.
  • NOV is down 4% today from Friday's close.

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More details on NOV:

National Oilwell Varco, Inc. designs, manufactures, and sells equipment and components used in oil and gas drilling, completion, and production; and provides oilfield services to the upstream oil and gas industry worldwide. The stock currently has a dividend yield of 3.3%. NOV has a PE ratio of 9.8. Currently there are 9 analysts that rate National Oilwell Varco a buy, 1 analyst rates it a sell, and 16 rate it a hold.

The average volume for National Oilwell Varco has been 7.0 million shares per day over the past 30 days. National Oilwell Varco has a market cap of $22.0 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.36 and a short float of 6.8% with 5.08 days to cover. Shares are down 14.9% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates National Oilwell Varco as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and poor profit margins.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 2.6%. Since the same quarter one year prior, revenues slightly increased by 7.7%. 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.
  • NOV's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.08, which illustrates the ability to avoid short-term cash problems.
  • NATIONAL OILWELL VARCO INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, NATIONAL OILWELL VARCO INC increased its bottom line by earning $5.71 versus $5.09 in the prior year. For the next year, the market is expecting a contraction of 38.3% in earnings ($3.53 versus $5.71).
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, NOV has underperformed the S&P 500 Index, declining 24.76% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Net operating cash flow has significantly decreased to $736.00 million or 51.51% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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