Chart Industries (GTLS): Today's Weak On High Volume Stock

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

  • GTLS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $19.2 million.
  • GTLS has traded 53,853 shares today.
  • GTLS is trading at 3.57 times the normal volume for the stock at this time of day.
  • GTLS is trading at a new low 5.08% 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 GTLS:

Chart Industries, Inc. manufactures and sells engineered equipment for the industrial gas, energy, and biomedical industries worldwide. The company operates in three segments: Energy & Chemicals (E&C), Distribution & Storage (D&S), and BioMedical. GTLS has a PE ratio of 15.8. Currently there are 7 analysts that rate Chart Industries a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Chart Industries has been 511,300 shares per day over the past 30 days. Chart has a market cap of $1.3 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.85 and a short float of 5.6% with 3.18 days to cover. Shares are up 23% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Chart Industries as a hold. 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 and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 9.6%. Since the same quarter one year prior, revenues slightly increased by 7.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • GTLS's debt-to-equity ratio is very low at 0.24 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.18, which illustrates the ability to avoid short-term cash problems.
  • CHART INDUSTRIES INC has improved earnings per share by 23.9% 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, CHART INDUSTRIES INC increased its bottom line by earning $2.65 versus $2.60 in the prior year. For the next year, the market is expecting a contraction of 34.0% in earnings ($1.75 versus $2.65).
  • 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 Machinery industry and the overall market, CHART INDUSTRIES INC'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 CHART INDUSTRIES INC is currently lower than what is desirable, coming in at 30.36%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 8.26% trails that of the industry average.

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