Trade-Ideas LLC identified

National Oilwell Varco

(

NOV

) as a "dead cat bounce" (down big yesterday but up big today) 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 $162.2 million.
  • NOV has traded 51,160 shares today.
  • NOV is up 3.1% today.
  • NOV was down 7.2% yesterday.

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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 operations; and provides oilfield services to the upstream oil and gas industry worldwide. The stock currently has a dividend yield of 0.6%. Currently there are 6 analysts that rate National Oilwell Varco a buy, 4 analysts rate it a sell, and 17 rate it a hold.

The average volume for National Oilwell Varco has been 5.9 million shares per day over the past 30 days. National Oilwell Varco has a market cap of $13.8 billion and is part of the basic materials sector and energy industry. The stock has a beta of 0.75 and a short float of 11% with 8.19 days to cover. Shares are up 1.7% 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

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Energy Equipment & Services industry. The net income has significantly decreased by 138.4% when compared to the same quarter one year ago, falling from $310.00 million to -$119.00 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Energy Equipment & Services industry and the overall market on the basis of return on equity, NATIONAL OILWELL VARCO INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for NATIONAL OILWELL VARCO INC is rather low; currently it is at 19.14%. It has decreased from the same quarter the previous year.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 25.59%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 142.10% compared to the year-earlier 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.
  • NATIONAL OILWELL VARCO INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, NATIONAL OILWELL VARCO INC swung to a loss, reporting -$2.15 versus $5.71 in the prior year. This year, the market expects an improvement in earnings (-$1.00 versus -$2.15).

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