Trade-Ideas: Cameron International Corporation (CAM) Is Today's

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 Cameron International Corporation ( CAM) 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 Cameron International Corporation as such a stock due to the following factors:

  • CAM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $260.0 million.
  • CAM has traded 120,271 shares today.
  • CAM is trading at 5.78 times the normal volume for the stock at this time of day.
  • CAM 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.

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More details on CAM:

Cameron International Corporation provides flow equipment products, systems, and services worldwide. CAM has a PE ratio of 20.5. Currently there are 9 analysts that rate Cameron International Corporation a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Cameron International Corporation has been 3.3 million shares per day over the past 30 days. Cameron International has a market cap of $13.7 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.24 and a short float of 2.9% with 1.59 days to cover. Shares are down 4.7% 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 Cameron International Corporation as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • CAM's revenue growth has slightly outpaced the industry average of 9.3%. Since the same quarter one year prior, revenues rose by 12.5%. 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.
  • Net operating cash flow has increased to $199.60 million or 11.82% when compared to the same quarter last year. In addition, CAMERON INTERNATIONAL CORP has also vastly surpassed the industry average cash flow growth rate of -71.33%.
  • CAMERON INTERNATIONAL CORP's earnings per share declined by 13.3% 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, CAMERON INTERNATIONAL CORP increased its bottom line by earning $3.02 versus $2.09 in the prior year. This year, the market expects an improvement in earnings ($3.25 versus $3.02).
  • Despite currently having a low debt-to-equity ratio of 0.32, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.08 is sturdy.

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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