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 Crown Holdings ( CCK) 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 Crown Holdings as such a stock due to the following factors:

  • CCK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $39.0 million.
  • CCK has traded 253,381 shares today.
  • CCK traded in a range 290.6% of the normal price range with a price range of $1.90.
  • CCK traded below its daily resistance level (quality: 28 days, meaning that the stock is crossing a resistance level set by the last 28 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 CCK:

Crown Holdings, Inc. designs, manufactures, and sells packaging products for consumer goods worldwide. CCK has a PE ratio of 23.4. Currently there are 6 analysts that rate Crown Holdings a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Crown Holdings has been 868,500 shares per day over the past 30 days. Crown has a market cap of $7.0 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.14 and a short float of 1.7% with 2.60 days to cover. Shares are up 15.5% year-to-date as of the close of trading on Monday.

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 Crown Holdings as a buy. The company's strengths can be seen in multiple areas, such as its notable return on equity, revenue growth and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Compared to other companies in the Containers & Packaging industry and the overall market, CROWN HOLDINGS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 5.5%. Since the same quarter one year prior, revenues slightly increased by 1.0%. 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.
  • CROWN HOLDINGS INC's earnings per share declined by 39.3% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, CROWN HOLDINGS INC reported lower earnings of $2.30 versus $3.75 in the prior year. This year, the market expects an improvement in earnings ($3.40 versus $2.30).
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • Net operating cash flow has decreased to -$495.00 million or 14.58% when compared to the same quarter last year. Despite a decrease in cash flow of 14.58%, CROWN HOLDINGS INC is still significantly exceeding the industry average of -73.65%.

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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