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 Corning ( GLW) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Corning as such a stock due to the following factors:
- GLW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $160.2 million.
- GLW has traded 11.2 million shares today.
- GLW is trading at 2.58 times the normal volume for the stock at this time of day.
- GLW crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend. EXCLUSIVE OFFER: Get the inside scoop on opportunities in GLW with the Ticky from Trade-Ideas. See the FREE profile for GLW NOW at Trade-Ideas More details on GLW: Corning Incorporated produces and sells specialty glasses, ceramics, and related materials worldwide. It operates through five segments: Display Technologies, Telecommunications, Environmental Technologies, Specialty Materials, and Life Sciences. The stock currently has a dividend yield of 2.7%. GLW has a PE ratio of 11.5. Currently there are 9 analysts that rate Corning a buy, 1 analyst rates it a sell, and 6 rate it a hold. The average volume for Corning has been 10.3 million shares per day over the past 30 days. Corning has a market cap of $21.7 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.62 and a short float of 2.2% with 2.81 days to cover. Shares are up 17.9% year to date as of the close of trading on Friday. 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 Corning 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, expanding profit margins, increase in stock price during the past year and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity. Highlights from the ratings report include:
- GLW's revenue growth has slightly outpaced the industry average of 4.3%. Since the same quarter one year prior, revenues slightly increased by 3.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- GLW's debt-to-equity ratio is very low at 0.14 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 4.24, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for CORNING INC is rather high; currently it is at 56.76%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 32.18% significantly outperformed against the industry average.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- CORNING INC has improved earnings per share by 43.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CORNING INC reported lower earnings of $1.15 versus $1.76 in the prior year. This year, the market expects an improvement in earnings ($1.26 versus $1.15).
- You can view the full Corning 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.