General Motors (GM) Is Today's Water-Logged And Getting Wetter 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 General Motors ( GM) 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 General Motors as such a stock due to the following factors:

  • GM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $289.2 million.
  • GM has traded 13.0 million shares today.
  • GM traded in a range 212.1% of the normal price range with a price range of $0.94.
  • GM traded below its daily resistance level (quality: 30 days, meaning that the stock is crossing a resistance level set by the last 30 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in GM with the Ticky from Trade-Ideas. See the FREE profile for GM NOW at Trade-Ideas

More details on GM:

General Motors Company (GM) designs, manufactures, and markets cars, crossovers, trucks, and automobile parts worldwide. The stock currently has a dividend yield of 3.5%. GM has a PE ratio of 29.1. Currently there are 9 analysts that rate General Motors a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for General Motors has been 12.2 million shares per day over the past 30 days. General has a market cap of $55.6 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 1.72 and a short float of 2.2% with 3.47 days to cover. Shares are down 15.4% year-to-date as of the close of trading on Friday.

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 General Motors as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 12.2%. Since the same quarter one year prior, revenues slightly increased by 1.5%. 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.
  • The debt-to-equity ratio is somewhat low, currently at 0.95, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.81 is somewhat weak and could be cause for future problems.
  • GENERAL MOTORS CO has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, GENERAL MOTORS CO reported lower earnings of $2.35 versus $2.93 in the prior year. This year, the market expects an improvement in earnings ($2.71 versus $2.35).
  • Net operating cash flow has decreased to $3,830.00 million or 21.72% when compared to the same quarter last year. Despite a decrease in cash flow of 21.72%, GENERAL MOTORS CO is in line with the industry average cash flow growth rate of -29.80%.
  • In its most recent trading session, GM has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Despite the stock's decline during the last year, it is still somewhat more expensive (in proportion to its earnings over the last year) than most other stocks in its industry. We feel, however, that other strengths this company displays offset this slight negative.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

null

More from Markets

Three Big Factors That Rocked the Stock Market Tuesday

Three Big Factors That Rocked the Stock Market Tuesday

Dow Tumbles Over 400 Points; S&P 500 and Nasdaq Also Finish Lower

Dow Tumbles Over 400 Points; S&P 500 and Nasdaq Also Finish Lower

Caterpillar Bulldozes Industrial Sector With Bad News on Earnings Call

Caterpillar Bulldozes Industrial Sector With Bad News on Earnings Call

Jim Cramer: If You're Afraid of the 10-Year Yield, Go to Cash

Jim Cramer: If You're Afraid of the 10-Year Yield, Go to Cash

Eli Lilly CEO Expresses Confidence in New Rheumatoid Arthritis Drug

Eli Lilly CEO Expresses Confidence in New Rheumatoid Arthritis Drug