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 Avis Budget Group ( CAR) 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 Avis Budget Group as such a stock due to the following factors:
- CAR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $35.4 million.
- CAR has traded 5.6 million shares today.
- CAR traded in a range 247.7% of the normal price range with a price range of $2.05.
- CAR traded below its daily resistance level (quality: 19 days, meaning that the stock is crossing a resistance level set by the last 19 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. EXCLUSIVE OFFER: Get the inside scoop on opportunities in CAR with the Ticky from Trade-Ideas. See the FREE profile for CAR NOW at Trade-Ideas More details on CAR: Avis Budget Group, Inc., together with its subsidiaries, provides car and truck rentals, and ancillary services to businesses and consumers worldwide. CAR has a PE ratio of 23.8. Currently there are 3 analysts that rate Avis Budget Group a buy, 1 analyst rates it a sell, and 1 rates it a hold. The average volume for Avis Budget Group has been 1.4 million shares per day over the past 30 days. Avis Budget Group has a market cap of $3.2 billion and is part of the services sector and diversified services industry. The stock has a beta of 2.62 and a short float of 11.3% with 9.29 days to cover. Shares are up 51.5% year to date as of the close of trading on Wednesday. STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more. TheStreetRatings.com Analysis: TheStreet Quant Ratings rates Avis Budget Group as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- CAR's revenue growth has slightly outpaced the industry average of 2.6%. 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.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Road & Rail industry and the overall market, AVIS BUDGET GROUP INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- Net operating cash flow has increased to $574.00 million or 22.38% when compared to the same quarter last year. In addition, AVIS BUDGET GROUP INC has also modestly surpassed the industry average cash flow growth rate of 12.96%.
- 48.65% is the gross profit margin for AVIS BUDGET GROUP INC 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 -1.39% is in-line with the industry average.
- Compared to its closing price of one year ago, CAR's share price has jumped by 79.18%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full Avis Budget Group Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.