Today's Weak On High Volume Stock: Greenbrier Companies (GBX)

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 Greenbrier Companies ( GBX) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Greenbrier Companies as such a stock due to the following factors:

  • GBX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $42.6 million.
  • GBX has traded 53,031 shares today.
  • GBX is trading at 2.09 times the normal volume for the stock at this time of day.
  • GBX is trading at a new low 3.04% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on GBX:

The Greenbrier Companies, Inc. designs, manufactures, and markets railroad freight car equipment in North America and Europe. The stock currently has a dividend yield of 0.8%. GBX has a PE ratio of 25.4. Currently there are 6 analysts that rate Greenbrier Companies a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Greenbrier Companies has been 649,600 shares per day over the past 30 days. Greenbrier Companies has a market cap of $2.0 billion and is part of the services sector and transportation industry. The stock has a beta of 2.81 and a short float of 15.6% with 8.29 days to cover. Shares are up 119.2% year-to-date as of the close of trading on Wednesday.

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 Greenbrier Companies as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, good cash flow from operations, notable return on equity and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 3.5%. Since the same quarter one year prior, revenues rose by 36.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 159.9% when compared to the same quarter one year prior, rising from -$56.03 million to $33.59 million.
  • Net operating cash flow has significantly increased by 203.96% to $14.92 million when compared to the same quarter last year. In addition, GREENBRIER COMPANIES INC has also vastly surpassed the industry average cash flow growth rate of -23.67%.
  • 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 Machinery industry and the overall market on the basis of return on equity, GREENBRIER COMPANIES INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • Powered by its strong earnings growth of 149.04% and other important driving factors, this stock has surged by 204.74% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these 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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