Iron Mountain (IRM) 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 Iron Mountain ( IRM) 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 Iron Mountain as such a stock due to the following factors:

  • IRM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $35.6 million.
  • IRM has traded 202,143 shares today.
  • IRM traded in a range 229.3% of the normal price range with a price range of $1.23.
  • IRM traded below its daily resistance level (quality: 13 days, meaning that the stock is crossing a resistance level set by the last 13 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 IRM:

Iron Mountain Incorporated, together with its subsidiaries, provides information management services primarily in North America, Europe, Latin America, and the Asia Pacific. The stock currently has a dividend yield of 3.8%. IRM has a PE ratio of 150.2. Currently there are 4 analysts that rate Iron Mountain a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Iron Mountain has been 1.9 million shares per day over the past 30 days. Iron Mountain has a market cap of $5.5 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 0.63 and a short float of 7.9% with 9.20 days to cover. Shares are down 6.4% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Iron Mountain as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and disappointing return on equity.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.6%. Since the same quarter one year prior, revenues slightly increased by 1.0%. 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.
  • The gross profit margin for IRON MOUNTAIN INC is rather high; currently it is at 58.89%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 0.53% is above that of the industry average.
  • The share price of IRON MOUNTAIN INC has not done very well: it is down 18.38% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
  • The debt-to-equity ratio is very high at 3.80 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, IRM maintains a poor quick ratio of 0.99, which illustrates the inability to avoid short-term cash problems.

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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