Trade-Ideas LLC identified

WABCO Holdings

(

WBC

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

  • WBC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $38.1 million.
  • WBC has traded 108,644 shares today.
  • WBC is trading at 14.45 times the normal volume for the stock at this time of day.
  • WBC is trading at a new low 9.01% 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 WBC:

WABCO Holdings Inc., together with its subsidiaries, provides electronic, mechanical, electro-mechanical, and aerodynamic products for commercial truck, bus, trailer, and passenger car manufacturers worldwide. WBC has a PE ratio of 32. Currently there are 8 analysts that rate WABCO Holdings a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for WABCO Holdings has been 381,100 shares per day over the past 30 days. WABCO has a market cap of $5.9 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 1.82 and a short float of 4% with 5.80 days to cover. Shares are up 6.3% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates WABCO Holdings as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and premium valuation.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 12.8%. Since the same quarter one year prior, revenues slightly increased by 5.6%. 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 debt-to-equity ratio is somewhat low, currently at 0.86, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, WBC has a quick ratio of 2.44, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for WABCO HOLDINGS INC is currently lower than what is desirable, coming in at 34.83%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.94% trails that of the industry average.

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