Agilent Technologies (A) 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 Agilent Technologies ( A) 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 Agilent Technologies as such a stock due to the following factors:

  • A has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $135.4 million.
  • A has traded 13.9 million shares today.
  • A traded in a range 205.6% of the normal price range with a price range of $2.71.
  • A traded below its daily resistance level (quality: 62 days, meaning that the stock is crossing a resistance level set by the last 62 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 A:

Agilent Technologies, Inc. provides bio-analytical and electronic measurement solutions and services to the life sciences, chemical analysis, diagnostics and genomics, communications, and electronics industries worldwide. The stock currently has a dividend yield of 0.9%. A has a PE ratio of 28.5. Currently there are 11 analysts that rate Agilent Technologies a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Agilent Technologies has been 2.3 million shares per day over the past 30 days. Agilent has a market cap of $20.0 billion and is part of the health care sector and health services industry. The stock has a beta of 1.50 and a short float of 0.6% with 0.76 days to cover. Shares are up 5% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Agilent Technologies as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. 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, A's share price has jumped by 29.27%, 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, A should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The current debt-to-equity ratio, 0.51, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, A has a quick ratio of 2.23, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for AGILENT TECHNOLOGIES INC is rather high; currently it is at 58.79%. Regardless of A's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, A's net profit margin of 12.28% compares favorably to the industry average.
  • A, with its decline in revenue, underperformed when compared the industry average of 13.4%. Since the same quarter one year prior, revenues slightly dropped by 2.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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