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 Omnicom Group ( OMC) 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 Omnicom Group as such a stock due to the following factors:
- OMC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $118.0 million.
- OMC has traded 3.9 million shares today.
- OMC traded in a range 208.1% of the normal price range with a price range of $2.89.
- OMC traded below its daily resistance level (quality: 5 days, meaning that the stock is crossing a resistance level set by the last 5 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 OMC with the Ticky from Trade-Ideas. See the FREE profile for OMC NOW at Trade-Ideas More details on OMC: Omnicom Group Inc., together with its subsidiaries, provides advertising, marketing, and corporate communications services in the Americas, Europe, the Middle East, Africa, and the Asia pacific. The stock currently has a dividend yield of 2.2%. OMC has a PE ratio of 20.1. Currently there are 5 analysts that rate Omnicom Group a buy, no analysts rate it a sell, and 7 rate it a hold. The average volume for Omnicom Group has been 1.3 million shares per day over the past 30 days. Omnicom Group has a market cap of $19.1 billion and is part of the services sector and media industry. The stock has a beta of 1.49 and a short float of 2.4% with 3.39 days to cover. Shares are down 0.2% year-to-date as of the close of trading on Monday. 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 Omnicom Group as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, notable return on equity, reasonable valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- Compared to its closing price of one year ago, OMC's share price has jumped by 34.99%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, OMC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Despite its growing revenue, the company underperformed as compared with the industry average of 3.1%. Since the same quarter one year prior, revenues slightly increased by 2.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Media industry and the overall market, OMNICOM GROUP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has significantly increased by 105.46% to $293.40 million when compared to the same quarter last year. In addition, OMNICOM GROUP has also vastly surpassed the industry average cash flow growth rate of -11.38%.
- You can view the full Omnicom 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.