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 or Stephanie Link.
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 eBay as such a stock due to the following factors:
- EBAY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $575.4 million.
- EBAY has traded 16.8 million shares today.
- EBAY traded in a range 202.6% of the normal price range with a price range of $2.04.
- EBAY traded below its daily resistance level (quality: 33 days, meaning that the stock is crossing a resistance level set by the last 33 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 EBAY with the Ticky from Trade-Ideas. See the FREE profile for EBAY NOW at Trade-Ideas
More details on EBAY:
eBay Inc. provides online platforms, tools, and services to help individuals and merchants in online and mobile commerce and payments in the United States and internationally. EBAY has a PE ratio of 24.8. Currently there are 24 analysts that rate eBay a buy, no analysts rate it a sell, and 7 rate it a hold.
The average volume for eBay has been 10.3 million shares per day over the past 30 days. eBay has a market cap of $67.4 billion and is part of the services sector and retail industry. The stock has a beta of 0.80 and a short float of 1.5% with 1.49 days to cover. Shares are up 2.1% year to date as of the close of trading on Tuesday.
rates eBay as a
. 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, reasonable valuation levels, increase in stock price during the past year and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- EBAY's revenue growth has slightly outpaced the industry average of 9.2%. Since the same quarter one year prior, revenues rose by 14.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Although EBAY's debt-to-equity ratio of 0.20 is very low, it is currently higher than that of the industry average. To add to this, EBAY has a quick ratio of 1.67, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has increased to $1,334.00 million or 15.59% when compared to the same quarter last year. Despite an increase in cash flow, EBAY INC's average is still marginally south of the industry average growth rate of 23.77%.
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. 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.
- You can view the full eBay Ratings Report.