Today's Water-Logged And Getting Wetter Stock: Kimberly-Clark Corporation (KMB)

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 Kimberly-Clark Corporation ( KMB) 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 Kimberly-Clark Corporation as such a stock due to the following factors:

  • KMB has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $239.5 million.
  • KMB has traded 1.3 million shares today.
  • KMB traded in a range 212.7% of the normal price range with a price range of $3.27.
  • KMB traded below its daily resistance level (quality: 67 days, meaning that the stock is crossing a resistance level set by the last 67 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 KMB:

Kimberly-Clark Corporation, together with its subsidiaries, manufactures and markets personal care, consumer tissue, and health care products worldwide. It operates through four segments: Personal Care, Consumer Tissue, K-C Professional, and Health Care. The stock currently has a dividend yield of 3%. KMB has a PE ratio of 20.0. Currently there are 2 analysts that rate Kimberly-Clark Corporation a buy, 1 analyst rates it a sell, and 7 rate it a hold.

The average volume for Kimberly-Clark Corporation has been 1.9 million shares per day over the past 30 days. Kimberly-Clark has a market cap of $42.6 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 0.03 and a short float of 1.9% with 3.20 days to cover. Shares are up 6.2% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Kimberly-Clark Corporation as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, notable return on equity, reasonable valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • KIMBERLY-CLARK 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 two years. We feel that this trend should continue. During the past fiscal year, KIMBERLY-CLARK CORP increased its bottom line by earning $5.54 versus $4.42 in the prior year. This year, the market expects an improvement in earnings ($6.12 versus $5.54).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Household Products industry. The net income increased by 101.9% when compared to the same quarter one year prior, rising from $267.00 million to $539.00 million.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Household Products industry and the overall market, KIMBERLY-CLARK CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • 38.55% is the gross profit margin for KIMBERLY-CLARK CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 10.16% trails the industry average.

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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