Trade-Ideas LLC identified

Canadian National Railway

(

CNI

) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Canadian National Railway as such a stock due to the following factors:

  • CNI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $76.2 million.
  • CNI has traded 976,321 shares today.
  • CNI traded in a range 209.1% of the normal price range with a price range of $2.43.
  • CNI traded below its daily resistance level (quality: 5 days, meaning that the stock is crossing a resistance level set by the last 5 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on CNI:

Canadian National Railway Company, together with its subsidiaries, engages in rail and related transportation business in North America. The stock currently has a dividend yield of 1.8%. CNI has a PE ratio of 16. Currently there are 7 analysts that rate Canadian National Railway a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Canadian National Railway has been 1.3 million shares per day over the past 30 days. Canadian National Railway has a market cap of $40.8 billion and is part of the services sector and transportation industry. Shares are down 6.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Canadian National Railway as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 9.7%. Since the same quarter one year prior, revenues slightly increased by 3.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CANADIAN NATIONAL RAILWAY CO has improved earnings per share by 21.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CANADIAN NATIONAL RAILWAY CO increased its bottom line by earning $3.85 versus $3.09 in the prior year. This year, the market expects an improvement in earnings ($4.38 versus $3.85).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Road & Rail industry. The net income increased by 18.1% when compared to the same quarter one year prior, going from $853.00 million to $1,007.00 million.
  • The gross profit margin for CANADIAN NATIONAL RAILWAY CO is rather high; currently it is at 55.06%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 31.25% is above that of the industry average.
  • Net operating cash flow has increased to $1,652.00 million or 24.39% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.74%.

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