Dresser-Rand Group (DRC) Is Today's Pre-Market Mover With Heavy 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 Dresser-Rand Group ( DRC) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Dresser-Rand Group as such a stock due to the following factors:

  • DRC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $168.1 million.
  • DRC traded 211,706 shares today in the pre-market hours as of 7:33 AM, representing 10.3% of its average daily volume.

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More details on DRC:

Dresser-Rand Group Inc., together with its subsidiaries, designs, manufactures, sells, and services rotating equipment solutions to the oil, gas, chemical, petrochemical, process, power generation, military, and other industries worldwide. DRC has a PE ratio of 41.0. Currently there are 4 analysts that rate Dresser-Rand Group a buy, 1 analyst rates it a sell, and 6 rate it a hold.

The average volume for Dresser-Rand Group has been 1.2 million shares per day over the past 30 days. Dresser-Rand Group has a market cap of $5.2 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.00 and a short float of 6.6% with 1.21 days to cover. Shares are up 13.8% year-to-date as of the close of trading on Tuesday.

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 Dresser-Rand Group as a buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Net operating cash flow has significantly increased by 244.66% to $35.50 million when compared to the same quarter last year. In addition, DRESSER-RAND GROUP INC has also vastly surpassed the industry average cash flow growth rate of 25.01%.
  • DRESSER-RAND GROUP INC's earnings per share declined by 44.9% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, DRESSER-RAND GROUP INC reported lower earnings of $2.19 versus $2.35 in the prior year. This year, the market expects an improvement in earnings ($2.60 versus $2.19).
  • The revenue fell significantly faster than the industry average of 19.3%. Since the same quarter one year prior, revenues fell by 22.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • DRC's debt-to-equity ratio of 0.87 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.85 is weak.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, the stock's 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 the 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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