Alcatel-Lucent (ALU) Moving On Heavy Pre-Market 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 Alcatel-Lucent ( ALU) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Alcatel-Lucent as such a stock due to the following factors:

  • ALU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $22.6 million.
  • ALU traded 957,300 shares today in the pre-market hours as of 8:24 AM, representing 14.6% of its average daily volume.

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More details on ALU:

Alcatel-Lucent provides Internet protocol (IP) and cloud networking, and ultra-broadband fixed and wireless access to service providers and their customers, enterprises, and institutions worldwide. The company operates in three segments: Core Networking, Access, and Other. The stock currently has a dividend yield of 5.3%. Currently there are 4 analysts that rate Alcatel-Lucent a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for Alcatel-Lucent has been 9.6 million shares per day over the past 30 days. Alcatel-Lucent has a market cap of $10.2 billion and is part of the technology sector and telecommunications industry. Shares are down 18.9% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Alcatel-Lucent as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:
  • ALU's revenue growth has slightly outpaced the industry average of 2.5%. Since the same quarter one year prior, revenues slightly increased by 4.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 73.68% and other important driving factors, this stock has surged by 108.52% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • 36.79% is the gross profit margin for ALCATEL-LUCENT 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 -2.46% is in-line with the industry average.
  • 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 Communications Equipment industry and the overall market, ALCATEL-LUCENT's return on equity significantly trails that of both the industry average and the S&P 500.
  • Currently the debt-to-equity ratio of 1.93 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Even though the debt-to-equity ratio is weak, ALU's quick ratio is somewhat strong at 1.03, demonstrating the ability to handle short-term liquidity needs.

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