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 "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 Waste Management as such a stock due to the following factors:
- WM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $88.9 million.
- WM has traded 711,981 shares today.
- WM traded in a range 224.6% of the normal price range with a price range of $1.33.
- WM traded below its daily resistance level (quality: 7 days, meaning that the stock is crossing a resistance level set by the last 7 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 WM:
Waste Management, Inc. provides waste management environmental services to residential, commercial, industrial, and municipal customers in North America. It offers collection, transfer, recycling and resource recovery, and disposal services. The stock currently has a dividend yield of 3.2%. WM has a PE ratio of 172.7. Currently there are 3 analysts that rate Waste Management a buy, no analysts rate it a sell, and 8 rate it a hold.
The average volume for Waste Management has been 1.6 million shares per day over the past 30 days. Waste Management has a market cap of $22.4 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 0.64 and a short float of 3.4% with 8.35 days to cover. Shares are up 7.9% year-to-date as of the close of trading on Tuesday.
rates Waste Management as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 6.7%. Since the same quarter one year prior, revenues slightly increased by 1.0%. 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 $555.00 million or 1.83% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -8.68%.
- 36.06% is the gross profit margin for WASTE MANAGEMENT INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, WM's net profit margin of 5.89% significantly trails the industry average.
- WASTE MANAGEMENT INC's earnings per share declined by 13.5% 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, WASTE MANAGEMENT INC reported lower earnings of $0.21 versus $1.76 in the prior year. This year, the market expects an improvement in earnings ($2.36 versus $0.21).
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full Waste Management Ratings Report.