Heavy Early Morning Activity On HD Supply Holdings (HDS)

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 HD Supply Holdings ( HDS) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified HD Supply Holdings as such a stock due to the following factors:

  • HDS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $32.6 million.
  • HDS traded 333,350 shares today in the pre-market hours as of 8:05 AM, representing 28.6% of its average daily volume.

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More details on HDS:

HD Supply Holdings, Inc. operates as an industrial distribution company in North America. It operates in four segments: Facilities Maintenance, Waterworks, Power Solutions, and Construction & Industrial - White Cap. HDS has a PE ratio of 68.7. Currently there are 11 analysts that rate HD Supply Holdings a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for HD Supply Holdings has been 958,500 shares per day over the past 30 days. HD Supply has a market cap of $5.5 billion and is part of the services sector and wholesale industry. Shares are up 15.9% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates HD Supply Holdings as a sell. Among the areas we feel are negative, one of the most important has been poor profit margins.

Highlights from the ratings report include:
  • The gross profit margin for HD SUPPLY HOLDINGS INC is currently lower than what is desirable, coming in at 29.25%. Regardless of HDS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -0.55% trails the industry average.
  • Net operating cash flow has significantly increased by 78.63% to -$119.00 million when compared to the same quarter last year. In addition, HD SUPPLY HOLDINGS INC has also vastly surpassed the industry average cash flow growth rate of 4.19%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, and has traded in line with the S&P 500. Regardless of the rise in share value over the previous year, we feel that the risks involved in investing in this stock do not compensate for any future upside potential.
  • HD SUPPLY HOLDINGS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($1.32 versus -$1.15).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Trading Companies & Distributors industry. The net income increased by 90.8% when compared to the same quarter one year prior, rising from -$131.00 million to -$12.00 million.

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