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 Visteon as such a stock due to the following factors:
- VC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $58.9 million.
- VC has traded 348,616 shares today.
- VC is trading at 1.97 times the normal volume for the stock at this time of day.
- VC 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.
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More details on VC:
Visteon Corporation provides climate, electronic and interior systems, modules, and components to automotive original equipment manufacturers worldwide. It operates in the Climate, Electronics, and Interiors segments. VC has a PE ratio of 9.1. Currently there are 5 analysts that rate Visteon a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for Visteon has been 662,500 shares per day over the past 30 days. Visteon has a market cap of $4.3 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 1.03 and a short float of 1.7% with 1.37 days to cover. Shares are down 8.4% year-to-date as of the close of trading on Thursday.
rates Visteon as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, good cash flow from operations, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 1.2%. Since the same quarter one year prior, revenues rose by 32.7%. 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.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Auto Components industry and the overall market, VISTEON CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has significantly increased by 152.38% to $53.00 million when compared to the same quarter last year. In addition, VISTEON CORP has also vastly surpassed the industry average cash flow growth rate of 71.59%.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- VC's debt-to-equity ratio of 0.81 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 1.23 is sturdy.
- You can view the full Visteon Ratings Report.