Trade-Ideas LLC identified

Esterline Technologies

(

ESL

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

  • ESL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $27.5 million.
  • ESL has traded 190,413 shares today.
  • ESL is trading at 37.62 times the normal volume for the stock at this time of day.
  • ESL is trading at a new low 7.01% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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 ESL:

TheStreet Recommends

Esterline Technologies Corporation designs, manufactures, and markets engineered products and systems primarily for aerospace and defense customers in the United States and internationally. It operates through three segments: Avionics & Controls, Sensors & Systems, and Advanced Materials. ESL has a PE ratio of 19. Currently there are 4 analysts that rate Esterline Technologies a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Esterline Technologies has been 296,600 shares per day over the past 30 days. Esterline has a market cap of $2.5 billion and is part of the industrial goods sector and aerospace/defense industry. The stock has a beta of 1.29 and a short float of 5.3% with 4.20 days to cover. Shares are down 25.3% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Esterline Technologies 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, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from the ratings report include:

  • The current debt-to-equity ratio, 0.51, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.39, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has increased to $50.48 million or 46.20% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 25.90%.
  • 37.98% is the gross profit margin for ESTERLINE TECHNOLOGIES CORP which we consider to be strong. Regardless of ESL's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.96% trails the industry average.
  • ESTERLINE TECHNOLOGIES CORP's earnings per share declined by 44.8% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, ESTERLINE TECHNOLOGIES CORP reported lower earnings of $5.15 versus $5.22 in the prior year. For the next year, the market is expecting a contraction of 9.0% in earnings ($4.69 versus $5.15).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Aerospace & Defense industry. The net income has significantly decreased by 46.3% when compared to the same quarter one year ago, falling from $36.90 million to $19.81 million.

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