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 weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Layne Christensen as such a stock due to the following factors:
- LAYN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.8 million.
- LAYN has traded 58,830 shares today.
- LAYN is trading at 4.01 times the normal volume for the stock at this time of day.
- LAYN is trading at a new low 4.08% 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.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in LAYN with the Ticky from Trade-Ideas. See the FREE profile for LAYN NOW at Trade-Ideas
More details on LAYN:
Layne Christensen Company provides water management, construction, and drilling services in North America and internationally. Currently there are no analysts that rate Layne Christensen a buy, no analysts rate it a sell, and 4 rate it a hold.
The average volume for Layne Christensen has been 282,500 shares per day over the past 30 days. Layne Christensen has a market cap of $124.6 million and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 0.73 and a short float of 27.5% with 5.35 days to cover. Shares are down 63.1% year-to-date as of the close of trading on Monday.
rates Layne Christensen as a
. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- The gross profit margin for LAYNE CHRISTENSEN CO is rather low; currently it is at 16.30%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -25.73% is significantly below that of the industry average.
- LAYN's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 59.37%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Construction & Engineering industry and the overall market, LAYNE CHRISTENSEN CO's return on equity significantly trails that of both the industry average and the S&P 500.
- LAYN's debt-to-equity ratio of 0.66 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.73 is weak.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 11.9%. Since the same quarter one year prior, revenues slightly dropped by 3.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full Layne Christensen Ratings Report.