Strong On High Relative Volume: Nuverra Environmental Solutions (NES)

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 Nuverra Environmental Solutions ( NES) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Nuverra Environmental Solutions as such a stock due to the following factors:

  • NES has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.7 million.
  • NES has traded 53,461 shares today.
  • NES is trading at 3.36 times the normal volume for the stock at this time of day.
  • NES is trading at a new high 3.19% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 NES:

Nuverra Environmental Solutions, Inc. provides full-cycle environmental solutions to customers focused on the development and ongoing production of oil and natural gas from shale formations in the United States. Currently there are 4 analysts that rate Nuverra Environmental Solutions a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Nuverra Environmental Solutions has been 366,700 shares per day over the past 30 days. Nuverra has a market cap of $405.8 million and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.45 and a short float of 32.3% with 21.48 days to cover. Shares are down 6.8% 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 Nuverra Environmental Solutions as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Energy Equipment & Services industry. The net income has significantly decreased by 81.1% when compared to the same quarter one year ago, falling from -$12.85 million to -$23.27 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Energy Equipment & Services industry and the overall market, NUVERRA ENVIRONMENTAL SOLUTN's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for NUVERRA ENVIRONMENTAL SOLUTN is currently lower than what is desirable, coming in at 26.88%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -18.34% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$4.04 million or 122.53% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Looking at the price performance of NES's shares over the past 12 months, there is not much good news to report: the stock is down 40.67%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.

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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