Trade-Ideas: Expeditors International Of Washington (EXPD) Is Today's

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 Expeditors International of Washington ( EXPD) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Expeditors International of Washington as such a stock due to the following factors:

  • EXPD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $60.6 million.
  • EXPD has traded 1.0 million shares today.
  • EXPD is trading at 3.71 times the normal volume for the stock at this time of day.
  • EXPD crossed below its 200-day simple moving average.

'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.

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More details on EXPD:

Expeditors International of Washington, Inc. provides logistics services. The stock currently has a dividend yield of 1.4%. EXPD has a PE ratio of 24.8. Currently there are 5 analysts that rate Expeditors International of Washington a buy, 2 analysts rate it a sell, and 5 rate it a hold.

The average volume for Expeditors International of Washington has been 1.4 million shares per day over the past 30 days. Expeditors International of Washington has a market cap of $8.6 billion and is part of the services sector and transportation industry. The stock has a beta of 0.86 and a short float of 2% with 2.78 days to cover. Shares are up 2.8% 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 Expeditors International of Washington as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, increase in net income and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • EXPD's revenue growth has slightly outpaced the industry average of 5.5%. Since the same quarter one year prior, revenues rose by 10.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • EXPD has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, EXPD has a quick ratio of 2.30, which demonstrates the ability of the company to cover short-term liquidity needs.
  • EXPEDITORS INTL WASH INC has improved earnings per share by 17.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, EXPEDITORS INTL WASH INC increased its bottom line by earning $1.70 versus $1.57 in the prior year. This year, the market expects an improvement in earnings ($1.89 versus $1.70).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Air Freight & Logistics industry average. The net income increased by 10.8% when compared to the same quarter one year prior, going from $92.40 million to $102.38 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Air Freight & Logistics industry and the overall market on the basis of return on equity, EXPEDITORS INTL WASH INC has underperformed in comparison with the industry average, but has exceeded that of 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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