Trade-Ideas LLC identified

KBR

(

KBR

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified KBR as such a stock due to the following factors:

  • KBR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $24.3 million.
  • KBR has traded 116,200 shares today.
  • KBR is down 3.3% today.
  • KBR was up 8.1% yesterday.

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More details on KBR:

KBR, Inc. operates as an engineering, procurement, construction, and services company worldwide. The company operates through three segments: Technology and Consulting, Engineering and Construction, and Government Services. The stock currently has a dividend yield of 2.3%. Currently there are 2 analysts that rate KBR a buy, no analysts rate it a sell, and 8 rate it a hold.

TST Recommends

The average volume for KBR has been 1.4 million shares per day over the past 30 days. KBR has a market cap of $2.0 billion and is part of the services sector and diversified services industry. The stock has a beta of 0.86 and a short float of 3.2% with 2.56 days to cover. Shares are down 22.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates KBR as a

sell

. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and poor profit margins.

Highlights from the ratings report include:

  • 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 Construction & Engineering industry and the overall market, KBR INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to $54.00 million or 65.82% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The gross profit margin for KBR INC is currently extremely low, coming in at 8.09%. Regardless of KBR's low profit margin, it has managed to increase from the same period last year.
  • KBR has underperformed the S&P 500 Index, declining 15.78% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • KBR, with its decline in revenue, underperformed when compared the industry average of 15.3%. Since the same quarter one year prior, revenues fell by 27.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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