United Continental Holdings (UAL) Down In Early Morning Trading

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 United Continental Holdings ( UAL) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified United Continental Holdings as such a stock due to the following factors:

  • UAL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $244.8 million.
  • UAL traded 17,519 shares today in the pre-market hours as of 9:10 AM.
  • UAL is down 2.1% today from Thursday's close.

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More details on UAL:

United Continental Holdings, Inc., through its subsidiaries, provides passenger and cargo transportation services. The company transports people and cargo through its mainline operations, which use jet aircraft with 118 seats, and its regional operations. UAL has a PE ratio of 35.3. Currently there are 9 analysts that rate United Continental Holdings a buy, 2 analysts rate it a sell, and 1 rates it a hold.

The average volume for United Continental Holdings has been 6.2 million shares per day over the past 30 days. United Continental has a market cap of $14.9 billion and is part of the services sector and transportation industry. Shares are up 5.4% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates United Continental Holdings as a hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and poor profit margins.

Highlights from the ratings report include:
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Airlines industry and the overall market, UNITED CONTINENTAL HLDGS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 76.59% to $694.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 62.95%.
  • UNITED CONTINENTAL HLDGS INC's earnings per share declined by 31.7% in the most recent quarter compared to the same quarter a year ago. 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, UNITED CONTINENTAL HLDGS INC turned its bottom line around by earning $1.30 versus -$2.32 in the prior year. This year, the market expects an improvement in earnings ($3.88 versus $1.30).
  • The debt-to-equity ratio is very high at 4.70 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, UAL has a quick ratio of 0.51, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Airlines industry. The net income has significantly decreased by 46.0% when compared to the same quarter one year ago, falling from -$417.00 million to -$609.00 million.

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