Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Teekay as such a stock due to the following factors:
- TK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $74.5 million.
- TK has traded 504,413 shares today.
- TK is trading at 8.38 times the normal volume for the stock at this time of day.
- TK crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.
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More details on TK:
Teekay Corporation provides crude oil and gas marine transportation services in Bermuda and internationally. The stock currently has a dividend yield of 2.3%. Currently there are 7 analysts that rate Teekay a buy, no analysts rate it a sell, and 2 rate it a hold.
The average volume for Teekay has been 529,700 shares per day over the past 30 days. Teekay has a market cap of $4.6 billion and is part of the services sector and transportation industry. The stock has a beta of 1.32 and a short float of 2.2% with 0.91 days to cover. Shares are up 25.2% year-to-date as of the close of trading on Thursday.
rates Teekay as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.
Highlights from the ratings report include:
- TK's revenue growth has slightly outpaced the industry average of 3.0%. Since the same quarter one year prior, revenues slightly increased by 5.0%. 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.
- Compared to its closing price of one year ago, TK's share price has jumped by 59.26%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- TEEKAY CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, TEEKAY CORP continued to lose money by earning -$1.62 versus -$2.30 in the prior year. This year, the market expects an improvement in earnings ($0.25 versus -$1.62).
- The debt-to-equity ratio is very high at 6.73 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, TK maintains a poor quick ratio of 0.90, which illustrates the inability to avoid short-term cash problems.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, TEEKAY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full Teekay Ratings Report.