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.

Trade-Ideas LLC identified Royal Dutch Shell ( RDS.A) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Royal Dutch Shell as such a stock due to the following factors:

  • RDS.A has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $195.4 million.
  • RDS.A traded 15,912 shares today in the pre-market hours as of 8:10 AM.
  • RDS.A is down 2% today from Friday's close.

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More details on RDS.A:

Royal Dutch Shell plc operates as an independent oil and gas company worldwide. It operates through Upstream and Downstream segments. The company explores for and extracts crude oil, natural gas, and natural gas liquids. The stock currently has a dividend yield of 5.2%. RDS.A has a PE ratio of 7.8.

The average volume for Royal Dutch Shell has been 4.3 million shares per day over the past 30 days. Royal Dutch Shell has a market cap of $193.1 billion and is part of the basic materials sector and energy industry. Shares are down 9.7% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Royal Dutch Shell as a hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • Net operating cash flow has significantly increased by 59.38% to $9,608.00 million when compared to the same quarter last year. In addition, ROYAL DUTCH SHELL PLC has also vastly surpassed the industry average cash flow growth rate of -13.05%.
  • RDS.A's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.72 is somewhat weak and could be cause for future problems.
  • 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ROYAL DUTCH SHELL PLC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The gross profit margin for ROYAL DUTCH SHELL PLC is currently extremely low, coming in at 12.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.64% trails that of the industry average.

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