Trade-Ideas LLC identified
) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Dril-Quip as such a stock due to the following factors:
- DRQ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $43.4 million.
- DRQ has traded 160,155 shares today.
- DRQ traded in a range 202.7% of the normal price range with a price range of $4.17.
- DRQ traded above its daily resistance level (quality: 7 days, meaning that the stock is crossing a resistance level set by the last 7 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' 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 positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.
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More details on DRQ:
Dril-Quip, Inc., together with its subsidiaries, designs, manufactures, sells, and services engineered offshore drilling and production equipment for use in deepwater, harsh environment, and severe service applications worldwide. DRQ has a PE ratio of 1. Currently there is 1 analyst that rates Dril-Quip a buy, 2 analysts rate it a sell, and 8 rate it a hold.
The average volume for Dril-Quip has been 557,400 shares per day over the past 30 days. Dril-Quip has a market cap of $2.0 billion and is part of the basic materials sector and energy industry. The stock has a beta of 0.21 and a short float of 5% with 2.49 days to cover. Shares are down 15.6% year-to-date as of the close of trading on Thursday.
rates Dril-Quip as a
. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.
Highlights from the ratings report include:
- DRQ has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 5.89, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for DRIL-QUIP INC is rather high; currently it is at 50.10%. It has increased from the same quarter the previous year.
- Despite the weak revenue results, DRQ has outperformed against the industry average of 37.7%. Since the same quarter one year prior, revenues fell by 16.7%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- DRIL-QUIP INC's earnings per share declined by 5.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, DRIL-QUIP INC increased its bottom line by earning $5.21 versus $4.16 in the prior year. For the next year, the market is expecting a contraction of 8.3% in earnings ($4.78 versus $5.21).
- Looking at the price performance of DRQ's shares over the past 12 months, there is not much good news to report: the stock is down 27.97%, 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. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- You can view the full Dril-Quip Ratings Report.