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.

Trade-Ideas LLC identified

SPX

(

SPW

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

  • SPW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $55.3 million.
  • SPW has traded 137,012 shares today.
  • SPW is trading at 8.69 times the normal volume for the stock at this time of day.
  • SPW is trading at a new low 3.17% 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 SPW:

SPX Corporation provides specialized engineered solutions worldwide. The company operates through two segments, Flow Technology, and Thermal Equipment and Services. The stock currently has a dividend yield of 1.8%. SPW has a PE ratio of 9.4. Currently there are 6 analysts that rate SPX a buy, 2 analysts rate it a sell, and 5 rate it a hold.

The average volume for SPX has been 409,900 shares per day over the past 30 days. SPX has a market cap of $3.5 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.16 and a short float of 2.7% with 1.67 days to cover. Shares are down 0.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates SPX as a

hold

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:

  • The debt-to-equity ratio is somewhat low, currently at 0.75, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.93 is somewhat weak and could be cause for future problems.
  • The gross profit margin for SPX CORP is currently lower than what is desirable, coming in at 30.30%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.73% is significantly below that of the industry average.
  • Net operating cash flow has decreased to $139.40 million or 46.95% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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