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 Newell Rubbermaid as such a stock due to the following factors:
- NWL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $80.9 million.
- NWL has traded 1.8 million shares today.
- NWL traded in a range 231% of the normal price range with a price range of $1.79.
- NWL traded below its daily resistance level (quality: 2 days, meaning that the stock is crossing a resistance level set by the last 2 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 NWL:
Newell Rubbermaid Inc. manufactures and markets consumer and commercial products worldwide. It operates through five segments: Writing, Home Solutions, Tools, Commercial Products, and Baby & Parenting. The stock currently has a dividend yield of 1.8%. NWL has a PE ratio of 23.6. Currently there are 9 analysts that rate Newell Rubbermaid a buy, no analysts rate it a sell, and 3 rate it a hold.
The average volume for Newell Rubbermaid has been 1.8 million shares per day over the past 30 days. Newell Rubbermaid has a market cap of $10.1 billion and is part of the consumer goods sector and consumer durables industry. The stock has a beta of 0.66 and a short float of 1.1% with 1.36 days to cover. Shares are down 0.3% year-to-date as of the close of trading on Thursday.
rates Newell Rubbermaid as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins, growth in earnings per share and solid stock price performance. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the ratings report include:
- NWL's revenue growth has slightly outpaced the industry average of 8.7%. Since the same quarter one year prior, revenues slightly increased by 1.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- 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. Compared to other companies in the Household Durables industry and the overall market, NEWELL RUBBERMAID INC's return on equity exceeds that of both the industry average and the S&P 500.
- 41.81% is the gross profit margin for NEWELL RUBBERMAID INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 8.23% is above that of the industry average.
- NEWELL RUBBERMAID INC's earnings per share improvement from the most recent quarter was slightly positive. 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, NEWELL RUBBERMAID INC increased its bottom line by earning $1.43 versus $1.34 in the prior year. This year, the market expects an improvement in earnings ($2.00 versus $1.43).
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full Newell Rubbermaid Ratings Report.