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 "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Union Pacific as such a stock due to the following factors:
- UNP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $524.5 million.
- UNP has traded 1.9 million shares today.
- UNP is trading at 5.65 times the normal volume for the stock at this time of day.
- UNP crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in UNP with the Ticky from Trade-Ideas. See the FREE profile for UNP NOW at Trade-Ideas
More details on UNP:
Union Pacific Corporation, through its subsidiary, Union Pacific Railroad Company, provides rail transportation services in North America. The stock currently has a dividend yield of 2%. UNP has a PE ratio of 18.1. Currently there are 13 analysts that rate Union Pacific a buy, no analysts rate it a sell, and 8 rate it a hold.
The average volume for Union Pacific has been 1.5 million shares per day over the past 30 days. Union Pacific has a market cap of $73.9 billion and is part of the services sector and transportation industry. The stock has a beta of 1.05 and a short float of 0.7% with 0.93 days to cover. Shares are up 25.2% year to date as of the close of trading on Friday.
rates Union Pacific as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, notable return on equity and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
Highlights from the ratings report include:
- UNP's revenue growth has slightly outpaced the industry average of 3.5%. Since the same quarter one year prior, revenues slightly increased by 4.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Compared to where it was 12 months ago, this stock has enjoyed a nice rise of 27.53% which was in line with the performance of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, UNP should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- UNION PACIFIC CORP has improved earnings per share by 13.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, UNION PACIFIC CORP increased its bottom line by earning $8.27 versus $6.72 in the prior year. This year, the market expects an improvement in earnings ($9.38 versus $8.27).
- 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 Road & Rail industry and the overall market, UNION PACIFIC CORP's return on equity exceeds that of both the industry average and the S&P 500.
- 43.23% is the gross profit margin for UNION PACIFIC CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 20.65% is above that of the industry average.
- You can view the full Union Pacific Ratings Report.