Trade-Ideas LLC identified

Landstar System

(

LSTR

) 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 Landstar System as such a stock due to the following factors:

  • LSTR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $33.0 million.
  • LSTR has traded 132,259 shares today.
  • LSTR traded in a range 244.6% of the normal price range with a price range of $4.76.
  • LSTR traded below its daily resistance level (quality: 5 days, meaning that the stock is crossing a resistance level set by the last 5 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.

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More details on LSTR:

Landstar System, Inc., together with its subsidiaries, provides integrated transportation management solutions in the United States and internationally. The company operates through two segments, Transportation Logistics and Insurance. The stock currently has a dividend yield of 0.6%. LSTR has a PE ratio of 18. Currently there are 5 analysts that rate Landstar System a buy, no analysts rate it a sell, and 9 rate it a hold.

The average volume for Landstar System has been 435,900 shares per day over the past 30 days. Landstar System has a market cap of $2.4 billion and is part of the services sector and transportation industry. The stock has a beta of 0.80 and a short float of 8.2% with 5.87 days to cover. Shares are down 6.2% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Landstar System as a

buy

. 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, notable return on equity, good cash flow from operations and growth in earnings per share. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 10.0%. Since the same quarter one year prior, revenues slightly increased by 2.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • LSTR's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, LSTR has a quick ratio of 1.85, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Road & Rail industry and the overall market, LANDSTAR SYSTEM INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • LANDSTAR SYSTEM INC has improved earnings per share by 9.8% 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. During the past fiscal year, LANDSTAR SYSTEM INC increased its bottom line by earning $3.09 versus $2.36 in the prior year. This year, the market expects an improvement in earnings ($3.36 versus $3.09).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Road & Rail industry average. The net income increased by 7.0% when compared to the same quarter one year prior, going from $36.76 million to $39.35 million.

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