Precision Drilling (PDS) Stock: Weak On High Volume Today

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

  • PDS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $21.9 million.
  • PDS has traded 387,757 shares today.
  • PDS is trading at 2.52 times the normal volume for the stock at this time of day.
  • PDS is trading at a new low 6.02% 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 PDS:

Precision Drilling Corporation provides energy services primarily to the North American oil and gas industry. It operates in two segments, Contract Drilling Services, and Completion and Production Services. The stock currently has a dividend yield of 3.9%. PDS has a PE ratio of 9.9. Currently there are 7 analysts that rate Precision Drilling a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Precision Drilling has been 3.1 million shares per day over the past 30 days. Precision has a market cap of $1.9 billion and is part of the basic materials sector and energy industry. Shares are down 36.2% year-to-date as of the close of trading on Thursday.

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 Precision Drilling as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and attractive valuation levels. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • PDS's revenue growth has slightly outpaced the industry average of 16.0%. Since the same quarter one year prior, revenues rose by 18.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 39.70% is the gross profit margin for PRECISION DRILLING CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.15% trails the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Energy Equipment & Services industry and the overall market, PRECISION DRILLING CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • PDS's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 37.84%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

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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