Clean Diesel Technologies (CDTI) Spikes on High Volume

NEW YORK (TheStreet) -- Clean Diesel Technologies  (CDTI) was spiking 18.18% to $2.73 on Thursday on higher-than-usual volume.

Volume of more than 1.38 million shares was traded by around 1:20 p.m. EST; average daily volume is 384,800 shares. The stock traded Thursday at a high of $2.90 and a low of $2.30. The stock's one-year high is $3.48; its year low is $1.10.

TheStreet Ratings team rates CLEAN DIESEL TECHNOLOGIES as a "sell" with a ratings score of E+. TheStreet Ratings Team has this to say about its recommendation:

"We rate CLEAN DIESEL TECHNOLOGIES (CDTI) a SELL. This is based on the combination of unfavorable investment measures, which should drive this stock to significantly underperform the majority of stocks that we rate. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity, weak operating cash flow, poor profit margins and generally disappointing historical performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The debt-to-equity ratio of 1.47 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, CDTI has a quick ratio of 0.66, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Chemicals industry and the overall market, CLEAN DIESEL TECHNOLOGIES's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$0.08 million or 104.95% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The gross profit margin for CLEAN DIESEL TECHNOLOGIES is currently lower than what is desirable, coming in at 32.36%. Regardless of CDTI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, CDTI's net profit margin of -7.67% significantly underperformed when compared to the industry average.
  • CDTI has underperformed the S&P 500 Index, declining 11.41% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • You can view the full analysis from the report here: CDTI Ratings Report

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