Today's Weak On High Volume Stock: Chart Industries (GTLS)

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

  • GTLS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $18.9 million.
  • GTLS has traded 66,926 shares today.
  • GTLS is trading at 3.99 times the normal volume for the stock at this time of day.
  • GTLS is trading at a new low 3.07% 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 GTLS:

Chart Industries, Inc. manufactures and sells engineered equipment for the production, storage, and end-use of hydrocarbon and industrial gases worldwide. The company operates in three segments: Energy & Chemicals (E&C), Distribution & Storage (D&S), and BioMedical. GTLS has a PE ratio of 14.2. Currently there are 7 analysts that rate Chart Industries a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Chart Industries has been 694,700 shares per day over the past 30 days. Chart has a market cap of $1.1 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.70 and a short float of 7.2% with 3.50 days to cover. Shares are down 66% year-to-date as of the close of trading on Friday.

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 Chart Industries as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.35, which illustrates the ability to avoid short-term cash problems.
  • CHART INDUSTRIES INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, CHART INDUSTRIES INC increased its bottom line by earning $2.60 versus $2.36 in the prior year. For the next year, the market is expecting a contraction of 4.6% in earnings ($2.48 versus $2.60).
  • GTLS'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 60.66%, which is also worse than the performance of the S&P 500 Index. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, GTLS is still more expensive than most of the other companies in its industry.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Machinery industry average. The net income has decreased by 6.5% when compared to the same quarter one year ago, dropping from $24.45 million to $22.85 million.

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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