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Trade-Ideas LLC identified

Western Union



) 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 Western Union as such a stock due to the following factors:

  • WU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $77.3 million.
  • WU has traded 2.5 million shares today.
  • WU traded in a range 206.2% of the normal price range with a price range of $0.78.
  • WU traded below its daily resistance level (quality: 12 days, meaning that the stock is crossing a resistance level set by the last 12 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 WU:

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TheStreet Recommends

The Western Union Company provides money movement and payment services worldwide. The company operates in three segments: Consumer-to-Consumer, Consumer-to-Business, and Business Solutions. The Consumer-to-Consumer segment offers cash money transfer services involving walk-in agent locations. The stock currently has a dividend yield of 3.1%. WU has a PE ratio of 12. Currently there are 4 analysts that rate Western Union a buy, 5 analysts rate it a sell, and 10 rate it a hold.

The average volume for Western Union has been 5.5 million shares per day over the past 30 days. Western Union has a market cap of $10.1 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.55 and a short float of 16% with 17.47 days to cover. Shares are up 10.3% year-to-date as of the close of trading on Monday.

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TheStreet Quant Ratings

rates Western Union as a


. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, expanding profit margins, good cash flow from operations, solid stock price performance and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • WESTERN UNION CO reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, WESTERN UNION CO increased its bottom line by earning $1.59 versus $1.43 in the prior year. This year, the market expects an improvement in earnings ($1.65 versus $1.59).
  • 46.77% is the gross profit margin for WESTERN UNION CO which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 13.68% trails the industry average.
  • Net operating cash flow has remained constant at $253.90 million with no significant change when compared to the same quarter last year. In addition, WESTERN UNION CO has modestly surpassed the industry average cash flow growth rate of -8.94%.
  • 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. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

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