Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified

Tesco

(

TESO

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

  • TESO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.0 million.
  • TESO has traded 214,986 shares today.
  • TESO is trading at 14.11 times the normal volume for the stock at this time of day.
  • TESO is trading at a new low 6.08% 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 TESO:

Tesco Corporation, together with its subsidiaries, is engaged in the design, manufacture, and service delivery of technology-based solutions for the upstream energy industry worldwide. The company operates through Top Drive and Tubular Services segments. The stock currently has a dividend yield of 1.8%. TESO has a PE ratio of 15.9. Currently there are 5 analysts that rate Tesco a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Tesco has been 414,600 shares per day over the past 30 days. Tesco has a market cap of $441.6 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.00 and a short float of 7.6% with 4.92 days to cover. Shares are down 12.7% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Tesco as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 14.6%. Since the same quarter one year prior, revenues slightly increased by 7.3%. 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.
  • TESO's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.70, which clearly demonstrates the ability to cover short-term cash needs.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Energy Equipment & Services industry and the overall market, TESCO CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Net operating cash flow has decreased to $16.91 million or 28.30% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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