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 or Stephanie Link.
Trade-Ideas LLC identified
) 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 Xerox Corporation as such a stock due to the following factors:
- XRX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $88.1 million.
- XRX has traded 6.3 million shares today.
- XRX traded in a range 253.7% of the normal price range with a price range of $0.56.
- XRX traded below its daily resistance level (quality: 55 days, meaning that the stock is crossing a resistance level set by the last 55 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 XRX:
Xerox Corporation provides business process and document management services worldwide. The stock currently has a dividend yield of 2.2%. XRX has a PE ratio of 11.1. Currently there are 5 analysts that rate Xerox Corporation a buy, 1 analyst rates it a sell, and 2 rate it a hold.
The average volume for Xerox Corporation has been 11.2 million shares per day over the past 30 days. Xerox has a market cap of $12.7 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.44 and a short float of 1% with 1.30 days to cover. Shares are up 51.2% year to date as of the close of trading on Friday.
rates Xerox Corporation as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, good cash flow from operations, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 21.6%. Since the same quarter one year prior, revenues slightly increased by 0.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 47.54% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, XRX should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Net operating cash flow has significantly increased by 133.77% to $533.00 million when compared to the same quarter last year. In addition, XEROX CORP has also vastly surpassed the industry average cash flow growth rate of -14.99%.
- 37.02% is the gross profit margin for XEROX CORP which we consider to be strong. Regardless of XRX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 5.01% trails the industry average.
- XEROX CORP's earnings per share improvement from the most recent quarter was slightly positive. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, XEROX CORP reported lower earnings of $0.88 versus $0.89 in the prior year. This year, the market expects an improvement in earnings ($1.12 versus $0.88).
- You can view the full Xerox Corporation Ratings Report.