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

  • ATW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $38.7 million.
  • ATW has traded 107,880 shares today.
  • ATW is trading at 2.14 times the normal volume for the stock at this time of day.
  • ATW is trading at a new low 3.03% 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 ATW:

Atwood Oceanics, Inc., an offshore drilling contractor, engages in the drilling and completion of exploratory and developmental oil and gas wells worldwide. The stock currently has a dividend yield of 3.3%. ATW has a PE ratio of 5.8. Currently there are 4 analysts that rate Atwood Oceanics a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for Atwood Oceanics has been 1.7 million shares per day over the past 30 days. Atwood Oceanics has a market cap of $1.9 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.34 and a short float of 5.5% with 2.46 days to cover. Shares are down 1.1% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Atwood Oceanics as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • ATW's revenue growth has slightly outpaced the industry average of 7.0%. Since the same quarter one year prior, revenues rose by 10.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for ATWOOD OCEANICS is rather high; currently it is at 59.01%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 34.69% significantly outperformed against the industry average.
  • ATW's debt-to-equity ratio of 0.69 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that ATW's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.97 is high and demonstrates strong liquidity.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Energy Equipment & Services industry and the overall market, ATWOOD OCEANICS's return on equity is below that of both the industry average and the S&P 500.
  • Net operating cash flow has declined marginally to $101.37 million or 7.56% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, ATWOOD OCEANICS has marginally lower results.

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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