Trade-Ideas LLC identified

Now

(

DNOW

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

  • DNOW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $19.1 million.
  • DNOW has traded 85,018 shares today.
  • DNOW is trading at 2.13 times the normal volume for the stock at this time of day.
  • DNOW is trading at a new low 5.04% 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 DNOW:

NOW Inc. distributes energy and industrial products in the United States, Canada, and internationally. Currently there are no analysts that rate Now a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Now has been 1.2 million shares per day over the past 30 days. Now has a market cap of $1.8 billion and is part of the basic materials sector and energy industry. Shares are down 34.5% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Now as a

sell

. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • NOW INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. For the next year, the market is expecting a contraction of 152.4% in earnings (-$0.56 versus $1.07).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Trading Companies & Distributors industry. The net income has significantly decreased by 800.0% when compared to the same quarter one year ago, falling from $32.00 million to -$224.00 million.
  • The gross profit margin for NOW INC is rather low; currently it is at 18.99%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -29.74% is significantly below that of the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 39.88%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 796.66% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • DNOW, with its decline in revenue, underperformed when compared the industry average of 2.5%. Since the same quarter one year prior, revenues fell by 29.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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