Water-Logged And Getting Wetter Stock Of The Day: Sensata Technologies Holding N.V (ST)

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 Sensata Technologies Holding N.V ( ST) 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 Sensata Technologies Holding N.V as such a stock due to the following factors:

  • ST has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $35.2 million.
  • ST has traded 307,679 shares today.
  • ST traded in a range 281% of the normal price range with a price range of $1.97.
  • ST traded below its daily resistance level (quality: 20 days, meaning that the stock is crossing a resistance level set by the last 20 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 ST:

Sensata Technologies Holding N.V, through its subsidiaries, engages in the development, manufacture, and sale of sensors and controls primarily in the Americas, the Asia Pacific, and Europe. The company operates in two segments, Sensors and Controls. ST has a PE ratio of 40.2. Currently there are 8 analysts that rate Sensata Technologies Holding N.V a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Sensata Technologies Holding N.V has been 1.1 million shares per day over the past 30 days. Sensata Technologies Holding N.V has a market cap of $7.6 billion and is part of the technology sector and electronics industry. Shares are up 11.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Sensata Technologies Holding N.V as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • ST's revenue growth has slightly outpaced the industry average of 5.1%. Since the same quarter one year prior, revenues rose by 13.4%. 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.
  • 40.01% is the gross profit margin for SENSATA TECHNOLOGIES HLDG NV which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 13.28% is above that of the industry average.
  • SENSATA TECHNOLOGIES HLDG NV' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SENSATA TECHNOLOGIES HLDG NV increased its bottom line by earning $1.05 versus $0.97 in the prior year. This year, the market expects an improvement in earnings ($2.43 versus $1.05).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Electrical Equipment industry and the overall market on the basis of return on equity, SENSATA TECHNOLOGIES HLDG NV has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • Compared to its closing price of one year ago, ST's share price has jumped by 31.19%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.

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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