Skip to main content

Trade-Ideas LLC identified

Rowan Companies

(

RDC

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

  • RDC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $68.1 million.
  • RDC has traded 257,085 shares today.
  • RDC is trading at 2.18 times the normal volume for the stock at this time of day.
  • RDC is trading at a new high 3.11% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in RDC with the Ticky from Trade-Ideas. See the FREE profile for RDC NOW at Trade-Ideas

More details on RDC:

TheStreet Recommends

Rowan Companies plc provides offshore oil and gas contract drilling services. It operates a fleet of 31 mobile offshore drilling units, including 27 self-elevating jack-up rigs and 4 ultra-deepwater drillships. The stock currently has a dividend yield of 3.4%. RDC has a PE ratio of 5. Currently there are 6 analysts that rate Rowan Companies a buy, 1 analyst rates it a sell, and 11 rate it a hold.

The average volume for Rowan Companies has been 4.4 million shares per day over the past 30 days. Rowan Companies has a market cap of $2.1 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.66 and a short float of 22.7% with 6.36 days to cover. Shares are up 0.4% year-to-date as of the close of trading on Monday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Rowan Companies as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable 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 weak operating cash flow.

Highlights from the ratings report include:

  • The current debt-to-equity ratio, 0.55, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 3.42, which clearly demonstrates the ability to cover short-term cash needs.
  • 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 Energy Equipment & Services industry and the overall market on the basis of return on equity, ROWAN COMPANIES PLC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Looking at the price performance of RDC's shares over the past 12 months, there is not much good news to report: the stock is down 27.10%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • Net operating cash flow has decreased to $160.10 million or 34.59% when compared to the same quarter last year. Despite a decrease in cash flow of 34.59%, ROWAN COMPANIES PLC is in line with the industry average cash flow growth rate of -36.01%.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.