Trade-Ideas: FedEx (FDX) Is Today's "Water-Logged And Getting Wetter" Stock
Trade-Ideas LLC identified FedEx ( FDX) 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 FedEx as such a stock due to the following factors:
- FDX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $191.2 million.
- FDX has traded 969,694 shares today.
- FDX traded in a range 212.9% of the normal price range with a price range of $5.29.
- FDX traded below its daily resistance level (quality: 34 days, meaning that the stock is crossing a resistance level set by the last 34 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 FDX: FedEx Corporation provides transportation, e-commerce, and business services in the United States and internationally. The stock currently has a dividend yield of 0.6%. FDX has a PE ratio of 42. Currently there are 9 analysts that rate FedEx a buy, no analysts rate it a sell, and 7 rate it a hold. The average volume for FedEx has been 1.7 million shares per day over the past 30 days. FedEx has a market cap of $44.2 billion and is part of the services sector and transportation industry. The stock has a beta of 1.51 and a short float of 1.4% with 3.13 days to cover. Shares are up 10.9% year-to-date as of the close of trading on Wednesday.
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Analysis:
rates FedEx as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- FDX's revenue growth has slightly outpaced the industry average of 6.3%. Since the same quarter one year prior, revenues slightly increased by 8.0%. 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.
- Net operating cash flow has slightly increased to $1,342.00 million or 1.51% when compared to the same quarter last year. In addition, FEDEX CORP has also vastly surpassed the industry average cash flow growth rate of -69.90%.
- Despite currently having a low debt-to-equity ratio of 0.59, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.43 is sturdy.
- FEDEX CORP's earnings per share declined by 16.0% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, FEDEX CORP reported lower earnings of $3.60 versus $6.79 in the prior year. This year, the market expects an improvement in earnings ($10.80 versus $3.60).
- The gross profit margin for FEDEX CORP is currently lower than what is desirable, coming in at 27.93%. Regardless of FDX's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.00% trails the industry average.
- You can view the full FedEx Ratings Report.
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