Trade-Ideas LLC identified

ServiceMaster Global Holdings

(

SERV

) 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 ServiceMaster Global Holdings as such a stock due to the following factors:

  • SERV has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $44.1 million.
  • SERV has traded 1.6 million shares today.
  • SERV traded in a range 226.4% of the normal price range with a price range of $3.34.
  • SERV traded below its daily resistance level (quality: 13 days, meaning that the stock is crossing a resistance level set by the last 13 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 SERV:

TST Recommends

ServiceMaster Global Holdings, Inc. provides residential and commercial services in the United States. It operates in three segments: Terminix, American Home Shield, and the Franchise Services Group. SERV has a PE ratio of 32. Currently there are 6 analysts that rate ServiceMaster Global Holdings a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for ServiceMaster Global Holdings has been 1.3 million shares per day over the past 30 days. ServiceMaster Global has a market cap of $5.4 billion and is part of the services sector and diversified services industry. The stock has a beta of 0.58 and a short float of 2.6% with 1.56 days to cover. Shares are up 0.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates ServiceMaster Global Holdings as a

hold

. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:

  • Compared to other companies in the Diversified Consumer Services industry and the overall market, SERVICEMASTER GLOBAL HLDGS'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 188.88% to $16.00 million when compared to the same quarter last year. In addition, SERVICEMASTER GLOBAL HLDGS has also vastly surpassed the industry average cash flow growth rate of -73.85%.
  • 49.50% is the gross profit margin for SERVICEMASTER GLOBAL HLDGS which we consider to be strong. Regardless of SERV's high profit margin, it has managed to decrease from the same period last year.
  • The debt-to-equity ratio is very high at 5.27 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, SERV maintains a poor quick ratio of 0.86, which illustrates the inability to avoid short-term cash problems.

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