Trade-Ideas LLC identified

Ocean Rig UDW

(

ORIG

) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Ocean Rig UDW as such a stock due to the following factors:

  • ORIG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.6 million.
  • ORIG has traded 177,132 shares today.
  • ORIG is trading at 2.81 times the normal volume for the stock at this time of day.
  • ORIG is trading at a new high 6.31% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 ORIG:

Ocean Rig UDW Inc., an offshore drilling contractor, provides oilfield services for offshore oil and gas exploration, development, and production drilling. It specializes in the ultra-deepwater and harsh-environment segment of the offshore drilling industry. The stock currently has a dividend yield of 25.9%. ORIG has a PE ratio of 1. Currently there are 3 analysts that rate Ocean Rig UDW a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Ocean Rig UDW has been 1.5 million shares per day over the past 30 days. Ocean Rig UDW has a market cap of $371.7 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.60 and a short float of 14.1% with 5.46 days to cover. Shares are down 76.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Ocean Rig UDW 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 also find weaknesses including a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Energy Equipment & Services industry average. The net income increased by 7.6% when compared to the same quarter one year prior, going from $69.59 million to $74.87 million.
  • Even though the current debt-to-equity ratio is 1.42, it is still below the industry average, suggesting that this level of debt is acceptable within the Energy Equipment & Services industry. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 2.89 is very high and demonstrates very strong liquidity.
  • OCEAN RIG UDW 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, OCEAN RIG UDW INC increased its bottom line by earning $1.97 versus $0.48 in the prior year. For the next year, the market is expecting a contraction of 2.5% in earnings ($1.92 versus $1.97).
  • ORIG'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 84.24%, 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. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

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