Today's Water-Logged And Getting Wetter Stock: Carbo Ceramics (CRR)

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 Carbo Ceramics ( CRR) 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 Carbo Ceramics as such a stock due to the following factors:

  • CRR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $56.5 million.
  • CRR has traded 1.3 million shares today.
  • CRR traded in a range 280% of the normal price range with a price range of $12.50.
  • CRR traded below its daily resistance level (quality: 187 days, meaning that the stock is crossing a resistance level set by the last 187 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 CRR:

CARBO Ceramics Inc., an oilfield services technology company, manufactures and sells ceramic proppants, resin-coated ceramic, and resin-coated sand proppants for use in the hydraulic fracturing of natural gas and oil wells in the United States and internationally. The stock currently has a dividend yield of 1.1%. CRR has a PE ratio of 30.9. Currently there are 3 analysts that rate Carbo Ceramics a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Carbo Ceramics has been 314,100 shares per day over the past 30 days. Carbo Ceramics has a market cap of $2.8 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.95 and a short float of 22% with 9.20 days to cover. Shares are up 4.7% 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 Carbo Ceramics as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Energy Equipment & Services industry average. The net income increased by 4.8% when compared to the same quarter one year prior, going from $17.58 million to $18.43 million.
  • CRR's revenue growth trails the industry average of 21.4%. Since the same quarter one year prior, revenues slightly increased by 0.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CRR has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.06, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has significantly increased by 159.05% to $44.11 million when compared to the same quarter last year. In addition, CARBO CERAMICS INC has also vastly surpassed the industry average cash flow growth rate of 22.16%.
  • 37.81% is the gross profit margin for CARBO CERAMICS INC 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 12.40% 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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