Today's Pre-Market Mover With Heavy Volume: Royal Dutch Shell (RDS.B)

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 Royal Dutch Shell ( RDS.B) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Royal Dutch Shell as such a stock due to the following factors:

  • RDS.B has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $70.6 million.
  • RDS.B traded 430,894 shares today in the pre-market hours as of 8:15 AM, representing 46.3% of its average daily volume.

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More details on RDS.B:

Royal Dutch Shell plc operates as an independent oil and gas company worldwide. The company explores for and extracts crude oil, natural gas, and natural gas liquids. The stock currently has a dividend yield of 4.9%. RDS.B has a PE ratio of 9.3.

The average volume for Royal Dutch Shell has been 1.1 million shares per day over the past 30 days. Royal Dutch Shell has a market cap of $232.3 billion and is part of the basic materials sector and energy industry. Shares are unchanged year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Royal Dutch Shell as a buy. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • RDS.B's debt-to-equity ratio is very low at 0.25 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.79 is somewhat weak and could be cause for future problems.
  • ROYAL DUTCH SHELL PLC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, ROYAL DUTCH SHELL PLC reported lower earnings of $5.18 versus $8.52 in the prior year. This year, the market expects an improvement in earnings ($14.49 versus $5.18).
  • RDS.B, with its decline in revenue, slightly underperformed the industry average of 1.9%. Since the same quarter one year prior, revenues slightly dropped by 7.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • In its most recent trading session, RDS.B has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.

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