Trade-Ideas LLC identified

Westinghouse Air Brake Technologies

(

WAB

) 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 Westinghouse Air Brake Technologies as such a stock due to the following factors:

  • WAB has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $62.2 million.
  • WAB has traded 464,910 shares today.
  • WAB traded in a range 214.5% of the normal price range with a price range of $3.00.
  • WAB 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 WAB:

Westinghouse Air Brake Technologies Corporation, doing business as Wabtec Corporation, provides technology-based equipment and services for the freight rail and passenger transit industries worldwide. It operates in two segments, Freight and Transit. The stock currently has a dividend yield of 0.4%. WAB has a PE ratio of 2. Currently there are 7 analysts that rate Westinghouse Air Brake Technologies a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Westinghouse Air Brake Technologies has been 1.1 million shares per day over the past 30 days. Westinghouse Air Brake has a market cap of $7.4 billion and is part of the services sector and transportation industry. The stock has a beta of 1.23 and a short float of 17.8% with 16.30 days to cover. Shares are up 11.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Westinghouse Air Brake Technologies as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, growth in earnings per share and increase in net income. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 19.4%. Since the same quarter one year prior, revenues slightly increased by 1.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.41, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, WAB has a quick ratio of 1.55, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 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. When compared to other companies in the Machinery industry and the overall market, WABTEC CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • WABTEC CORP has improved earnings per share by 10.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, WABTEC CORP increased its bottom line by earning $4.10 versus $3.62 in the prior year. This year, the market expects an improvement in earnings ($4.31 versus $4.10).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 9.8% when compared to the same quarter one year prior, going from $92.69 million to $101.78 million.

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