Trade-Ideas LLC identified

Waste Management

(

WM

) 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 $137.0 million.
  • WM has traded 283,517 shares today.
  • WM traded in a range 236.7% of the normal price range with a price range of $1.50.
  • WM traded below its daily resistance level (quality: 20 days, meaning that the stock is crossing a resistance level set by the last 20 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., through its subsidiaries, provides waste management environmental services to residential, commercial, industrial, and municipal customers in North America. The stock currently has a dividend yield of 2.4%. WM has a PE ratio of 34. Currently there are 5 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 2.1 million shares per day over the past 30 days. Waste Management has a market cap of $29.9 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 0.71 and a short float of 1.3% with 2.62 days to cover. Shares are up 26.2% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Waste Management as a

buy

. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, notable return on equity, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • Powered by its strong earnings growth of 307.14% and other important driving factors, this stock has surged by 39.29% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, WM should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Services & Supplies industry. The net income increased by 300.0% when compared to the same quarter one year prior, rising from -$129.00 million to $258.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.2%. Since the same quarter one year prior, revenues slightly increased by 4.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 Commercial Services & Supplies industry and the overall market, WASTE MANAGEMENT INC's return on equity exceeds that of both the industry average and the S&P 500.
  • 37.97% 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. Along with this, the net profit margin of 8.12% is above that of the industry average.

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