Weak On High Volume: MYR Group (MYRG)

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

  • MYRG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.6 million.
  • MYRG has traded 72,390 shares today.
  • MYRG is trading at 6.16 times the normal volume for the stock at this time of day.
  • MYRG 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 MYRG:

MYR Group Inc., through its subsidiaries, provides electrical construction services in the United States and Canada. It operates through two segments, Transmission and Distribution, and Commercial and Industrial. MYRG has a PE ratio of 19.3. Currently there are 4 analysts that rate MYR Group a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for MYR Group has been 158,000 shares per day over the past 30 days. MYR Group has a market cap of $642.8 million and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 0.79 and a short float of 2.1% with 2.00 days to cover. Shares are up 10.9% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates MYR Group as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share and attractive valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • Powered by its strong earnings growth of 45.65% and other important driving factors, this stock has surged by 26.90% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MYRG should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Construction & Engineering industry. The net income increased by 41.0% when compared to the same quarter one year prior, rising from $10.02 million to $14.13 million.
  • MYRG 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. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.46, which illustrates the ability to avoid short-term cash problems.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 3.1%. Since the same quarter one year prior, revenues slightly dropped by 1.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • MYR GROUP INC has improved earnings per share by 45.6% 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 two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, MYR GROUP INC increased its bottom line by earning $1.71 versus $1.60 in the prior year. For the next year, the market is expecting a contraction of 1.2% in earnings ($1.69 versus $1.71).

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MYR Group (MYRG) Weak On High Volume Today

MYR Group (MYRG) Weak On High Volume Today