Weak On High Volume: AECOM Technology (ACM)

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

  • ACM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $65.8 million.
  • ACM has traded 277,549 shares today.
  • ACM is trading at 3.74 times the normal volume for the stock at this time of day.
  • ACM is trading at a new low 3.02% 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 ACM:

AECOM Technology Corporation, together with its subsidiaries, provides professional technical and management support services for public and private clients in worldwide. The company operates through two segments, Professional Technical Services (PTS) and Management Support Services (MSS). ACM has a PE ratio of 13.4. Currently there are 4 analysts that rate AECOM Technology a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for AECOM Technology has been 1.6 million shares per day over the past 30 days. AECOM Technology has a market cap of $3.3 billion and is part of the services sector and diversified services industry. The stock has a beta of 1.87 and a short float of 16.2% with 5.64 days to cover. Shares are up 12.1% year-to-date as of the close of trading on Monday.

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 AECOM Technology as a buy. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, largely solid financial position with reasonable debt levels by most measures, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • AECOM TECHNOLOGY CORP reported flat earnings per share in the most recent quarter. 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, AECOM TECHNOLOGY CORP turned its bottom line around by earning $2.36 versus -$0.57 in the prior year. This year, the market expects an improvement in earnings ($2.52 versus $2.36).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.2%. Since the same quarter one year prior, revenues slightly dropped by 4.8%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
  • Despite currently having a low debt-to-equity ratio of 0.47, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.44 is sturdy.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Construction & Engineering industry and the overall market, AECOM TECHNOLOGY CORP's return on equity is below that of both the industry average and the S&P 500.

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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