Clean Harbors (CLH): Today's Weak On High Volume Stock

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

  • CLH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.4 million.
  • CLH has traded 98,688 shares today.
  • CLH is trading at 5.59 times the normal volume for the stock at this time of day.
  • CLH is trading at a new low 4.04% 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 CLH:

Clean Harbors, Inc. provides environmental, energy, and industrial services primarily in the United States, Puerto Rico, and Canada. CLH has a PE ratio of 37.2. Currently there are 5 analysts that rate Clean Harbors a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Clean Harbors has been 401,200 shares per day over the past 30 days. Clean Harbors has a market cap of $3.7 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 0.69 and a short float of 6.3% with 11.13 days to cover. Shares are up 0.8% year-to-date as of the close of trading on Thursday.

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 Clean Harbors as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations, increase in stock price during the past year and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The debt-to-equity ratio is somewhat low, currently at 0.93, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.47, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has increased to $110.35 million or 12.57% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.50%.
  • The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • CLEAN HARBORS INC has improved earnings per share by 23.7% 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, CLEAN HARBORS INC reported lower earnings of $1.57 versus $2.38 in the prior year. This year, the market expects an improvement in earnings ($1.80 versus $1.57).

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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