United Parcel Service Inc (UPS) Class B (UPS) Shows Signs Of Being Water-Logged And Getting Wetter

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 United Parcel Service Inc (UPS) Class B ( UPS) 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 United Parcel Service Inc (UPS) Class B as such a stock due to the following factors:

  • UPS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $310.6 million.
  • UPS has traded 1.8 million shares today.
  • UPS traded in a range 202.7% of the normal price range with a price range of $1.92.
  • UPS 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 UPS:

United Parcel Service, Inc., a package delivery company, provides transportation, logistics, and financial services in the United States and internationally. It operates in three segments: U.S. Domestic Package, International Package, and Supply Chain and Freight. The U.S. The stock currently has a dividend yield of 2.4%. UPS has a PE ratio of 66.7. Currently there are 10 analysts that rate United Parcel Service Inc (UPS) Class B a buy, no analysts rate it a sell, and 10 rate it a hold.

The average volume for United Parcel Service Inc (UPS) Class B has been 3.1 million shares per day over the past 30 days. United Parcel Service Inc (UPS) Class B has a market cap of $74.5 billion and is part of the services sector and transportation industry. The stock has a beta of 0.78 and a short float of 1.9% with 4.54 days to cover. Shares are up 42.3% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates United Parcel Service Inc (UPS) Class B as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, good cash flow from operations, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Air Freight & Logistics industry. The net income increased by 133.9% when compared to the same quarter one year prior, rising from $469.00 million to $1,097.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 4.2%. Since the same quarter one year prior, revenues slightly increased by 3.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has increased to $1,629.00 million or 30.00% when compared to the same quarter last year. In addition, UNITED PARCEL SERVICE INC has also modestly surpassed the industry average cash flow growth rate of 22.16%.
  • Powered by its strong earnings growth of 141.66% and other important driving factors, this stock has surged by 37.47% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • UNITED PARCEL SERVICE INC reported significant earnings per share improvement 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, UNITED PARCEL SERVICE INC reported lower earnings of $0.80 versus $3.83 in the prior year. This year, the market expects an improvement in earnings ($4.75 versus $0.80).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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