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 weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Ensco as such a stock due to the following factors:
- ESV has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $136.1 million.
- ESV has traded 1.0 million shares today.
- ESV is trading at 7.28 times the normal volume for the stock at this time of day.
- ESV is trading at a new low 9.02% 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 ESV:
Ensco plc provides offshore contract drilling services to the oil and gas industry worldwide. The company operates through three segments: Floaters, Jackups, and Other. The stock currently has a dividend yield of 7.5%. ESV has a PE ratio of 18.1. Currently there is 1 analyst that rates Ensco a buy, 3 analysts rate it a sell, and 10 rate it a hold.
The average volume for Ensco has been 4.9 million shares per day over the past 30 days. Ensco has a market cap of $9.3 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.60 and a short float of 9.2% with 5.12 days to cover. Shares are down 30.3% year-to-date as of the close of trading on Tuesday.
rates Ensco as a
. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- ENSCO PLC has improved earnings per share by 16.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, ENSCO PLC increased its bottom line by earning $6.04 versus $5.24 in the prior year. This year, the market expects an improvement in earnings ($6.22 versus $6.04).
- Despite its growing revenue, the company underperformed as compared with the industry average of 16.0%. Since the same quarter one year prior, revenues slightly increased by 8.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.50, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that ESV's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.03 is high and demonstrates strong liquidity.
- Net operating cash flow has declined marginally to $601.90 million or 7.14% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Energy Equipment & Services industry and the overall market, ENSCO PLC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full Ensco Ratings Report.