Trade-Ideas LLC identified

Quanta Services

(

PWR

) 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 Quanta Services as such a stock due to the following factors:

  • PWR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $62.3 million.
  • PWR has traded 2.3 million shares today.
  • PWR traded in a range 238.6% of the normal price range with a price range of $1.74.
  • PWR traded below its daily resistance level (quality: 527 days, meaning that the stock is crossing a resistance level set by the last 527 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 PWR:

Quanta Services, Inc. provides specialty contracting services to the electric power, and oil and gas industries in North America and internationally. PWR has a PE ratio of 22. Currently there are 9 analysts that rate Quanta Services a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Quanta Services has been 3.3 million shares per day over the past 30 days. Quanta Services has a market cap of $5.0 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.15 and a short float of 14.6% with 10.20 days to cover. Shares are down 7.7% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Quanta Services as a

hold

. 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 and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:

  • PWR's revenue growth has slightly outpaced the industry average of 8.0%. Since the same quarter one year prior, revenues slightly increased by 1.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • PWR's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.44, which illustrates the ability to avoid short-term cash problems.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Construction & Engineering industry and the overall market, QUANTA SERVICES INC's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for QUANTA SERVICES INC is currently extremely low, coming in at 14.34%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.46% trails that of the industry average.

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