Trade-Ideas LLC identified

United Rentals

(

URI

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

  • URI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $100.3 million.
  • URI has traded 247,576 shares today.
  • URI is trading at 2.11 times the normal volume for the stock at this time of day.
  • URI is trading at a new low 3.03% 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 URI with the Ticky from Trade-Ideas. See the FREE profile for URI NOW at Trade-Ideas

More details on URI:

United Rentals, Inc., through its subsidiaries, operates as an equipment rental company. It operates in two segments, General Rentals; and Trench, Power, and Pump. URI has a PE ratio of 1. Currently there are 7 analysts that rate United Rentals a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for United Rentals has been 2.5 million shares per day over the past 30 days. United Rentals has a market cap of $5.7 billion and is part of the services sector and diversified services industry. The stock has a beta of 2.36 and a short float of 8.4% with 4.57 days to cover. Shares are down 13.4% year-to-date as of the close of trading on Wednesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates United Rentals as a

hold

. The company's strengths can be seen in multiple areas, such as its notable return on equity, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Trading Companies & Distributors industry and the overall market, UNITED RENTALS INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 4.8%. Since the same quarter one year prior, revenues slightly dropped by 2.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The debt-to-equity ratio is very high at 5.53 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, URI maintains a poor quick ratio of 0.90, which illustrates the inability to avoid short-term cash problems.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Trading Companies & Distributors industry average. The net income has decreased by 12.9% when compared to the same quarter one year ago, dropping from $194.00 million to $169.00 million.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.