Trade-Ideas LLC identified

Quanta Services

(

PWR

) as a weak on high relative volume 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 $68.5 million.
  • PWR has traded 357,598 shares today.
  • PWR is trading at 2.76 times the normal volume for the stock at this time of day.
  • PWR is trading at a new low 3.02% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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 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 23. Currently there are 7 analysts that rate Quanta Services a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Quanta Services has been 4.2 million shares per day over the past 30 days. Quanta Services has a market cap of $3.5 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 0.62 and a short float of 9.6% with 5.94 days to cover. Shares are down 24.1% year-to-date as of the close of trading on Friday.

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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 increase in net income, 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, feeble growth in the company's earnings per share and poor profit margins.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Construction & Engineering industry. The net income increased by 128.6% when compared to the same quarter one year prior, rising from $94.65 million to $216.39 million.
  • PWR's debt-to-equity ratio is very low at 0.11 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 1.31, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has significantly increased by 68.77% to $110.21 million when compared to the same quarter last year. Despite an increase in cash flow, QUANTA SERVICES INC's cash flow growth rate is still lower than the industry average growth rate of 92.92%.
  • The share price of QUANTA SERVICES INC has not done very well: it is down 22.95% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
  • QUANTA SERVICES INC's earnings per share declined by 42.5% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, QUANTA SERVICES INC reported lower earnings of $1.25 versus $1.87 in the prior year. For the next year, the market is expecting a contraction of 12.0% in earnings ($1.10 versus $1.25).

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