Trade-Ideas LLC identified

Teekay Tankers

(

TNK

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

  • TNK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.2 million.
  • TNK has traded 341,226 shares today.
  • TNK is trading at 2.47 times the normal volume for the stock at this time of day.
  • TNK is trading at a new high 3.06% 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 TNK:

Teekay Tankers Ltd. engages in the marine transportation of crude oil and refined petroleum products through the operation of its oil and product tankers worldwide. The company also provides ship-to-ship transfer services. The stock currently has a dividend yield of 11.2%. TNK has a PE ratio of 2. Currently there are 4 analysts that rate Teekay Tankers a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Teekay Tankers has been 2.3 million shares per day over the past 30 days. Teekay Tankers has a market cap of $500.9 million and is part of the services sector and transportation industry. The stock has a beta of 2.35 and a short float of 9.4% with 3.83 days to cover. Shares are down 52.5% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Teekay Tankers as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • TNK's very impressive revenue growth greatly exceeded the industry average of 24.6%. Since the same quarter one year prior, revenues leaped by 53.4%. 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.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, TEEKAY TANKERS LTD's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • The gross profit margin for TEEKAY TANKERS LTD is rather high; currently it is at 52.34%. Regardless of TNK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TNK's net profit margin of 23.63% significantly outperformed against the industry.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 46.56%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 26.47% compared to 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.
  • The debt-to-equity ratio of 1.19 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, TNK maintains a poor quick ratio of 0.93, which illustrates the inability to avoid short-term cash problems.

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