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 Navistar International ( NAV) 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 Navistar International as such a stock due to the following factors:
- NAV has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $35.7 million.
- NAV has traded 413,642 shares today.
- NAV traded in a range 245.9% of the normal price range with a price range of $2.70.
- NAV 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 NAV with the Ticky from Trade-Ideas. See the FREE profile for NAV NOW at Trade-Ideas More details on NAV: Navistar International Corporation, through its subsidiaries, manufactures and sells commercial and military trucks, diesel engines, and school and commercial buses; and provides service parts for trucks and diesel engines worldwide. Currently there are 5 analysts that rate Navistar International a buy, 1 analyst rates it a sell, and 9 rate it a hold. The average volume for Navistar International has been 1.1 million shares per day over the past 30 days. Navistar International has a market cap of $3.1 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 3.10 and a short float of 28.3% with 9.28 days to cover. Shares are down 1.2% year-to-date as of the close of trading on Tuesday. 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 Navistar International as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and poor profit margins. Highlights from the ratings report include:
- Net operating cash flow has significantly decreased to $66.00 million or 75.00% 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 NAVISTAR INTERNATIONAL CORP is currently extremely low, coming in at 10.25%. Regardless of NAV's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, NAV's net profit margin of -5.59% significantly underperformed when compared to the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 17.3%. Since the same quarter one year prior, revenues fell by 13.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- This stock has increased by 50.30% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in NAV do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- NAVISTAR INTERNATIONAL CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, NAVISTAR INTERNATIONAL CORP continued to lose money by earning -$10.65 versus -$42.58 in the prior year. This year, the market expects an improvement in earnings (-$2.30 versus -$10.65).
- You can view the full Navistar International 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.