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

Hornbeck Offshore Services

(

HOS

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

  • HOS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.0 million.
  • HOS has traded 61,586 shares today.
  • HOS is trading at 2.75 times the normal volume for the stock at this time of day.
  • HOS is trading at a new low 3.04% 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 HOS:

Hornbeck Offshore Services, Inc., through its subsidiaries, operates offshore supply vessels (OSVs) and multi-purpose support vessels (MPSVs) in the U.S. Gulf of Mexico, Latin America, and internationally. HOS has a PE ratio of 6. Currently there are 5 analysts that rate Hornbeck Offshore Services a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Hornbeck Offshore Services has been 1.0 million shares per day over the past 30 days. Hornbeck Offshore Services has a market cap of $700.9 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.13 and a short float of 30.3% with 11.93 days to cover. Shares are down 23.6% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Hornbeck Offshore Services as a

hold

. The company's strengths can be seen in multiple areas, such as its increase in net income, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 204.7% when compared to the same quarter one year prior, rising from $11.77 million to $35.85 million.
  • HOS's debt-to-equity ratio of 0.76 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 4.66 is very high and demonstrates very strong liquidity.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Energy Equipment & Services industry and the overall market, HORNBECK OFFSHORE SVCS INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • HOS's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 58.24%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.

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