Strong On High Relative Volume: Nabors Industries (NBR)

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

  • NBR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $163.4 million.
  • NBR has traded 1.2 million shares today.
  • NBR is trading at 2.97 times the normal volume for the stock at this time of day.
  • NBR is trading at a new high 4.04% 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 NBR:

Nabors Industries Ltd., together with its subsidiaries, provides drilling and rig services; and completion and production services. It offers equipment manufacturing, instrumentation optimization software, and directional drilling services. The stock currently has a dividend yield of 2.3%. NBR has a PE ratio of 9.2. Currently there are 10 analysts that rate Nabors Industries a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Nabors Industries has been 8.7 million shares per day over the past 30 days. Nabors has a market cap of $3.0 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.77 and a short float of 5.1% with 1.22 days to cover. Shares are down 32.4% 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 Nabors Industries as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.

Highlights from the ratings report include:
  • NBR's revenue growth has slightly outpaced the industry average of 15.9%. Since the same quarter one year prior, revenues rose by 16.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • NABORS INDUSTRIES LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. 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, NABORS INDUSTRIES LTD reported lower earnings of $0.51 versus $0.80 in the prior year. This year, the market expects an improvement in earnings ($1.20 versus $0.51).
  • NBR'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 31.98%, 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. 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, NBR is still more expensive than most of the other companies in its industry.
  • The gross profit margin for NABORS INDUSTRIES LTD is currently lower than what is desirable, coming in at 34.83%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 5.84% trails that of the industry average.

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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