TripAdvisor (TRIP) Showing Signs Of Being Water-Logged And Getting Wetter

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 TripAdvisor ( TRIP) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified TripAdvisor as such a stock due to the following factors:

  • TRIP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $147.5 million.
  • TRIP has traded 1.0 million shares today.
  • TRIP traded in a range 235.5% of the normal price range with a price range of $4.45.
  • TRIP traded below its daily resistance level (quality: 84 days, meaning that the stock is crossing a resistance level set by the last 84 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in TRIP with the Ticky from Trade-Ideas. See the FREE profile for TRIP NOW at Trade-Ideas

More details on TRIP:

TripAdvisor, Inc. operates as an online travel company. The company operates through two segments, Hotel and Other. TRIP has a PE ratio of 50.1. Currently there are 5 analysts that rate TripAdvisor a buy, 1 analyst rates it a sell, and 14 rate it a hold.

The average volume for TripAdvisor has been 2.2 million shares per day over the past 30 days. TripAdvisor has a market cap of $10.2 billion and is part of the technology sector and internet industry. The stock has a beta of 2.09 and a short float of 13.8% with 6.14 days to cover. Shares are up 4.1% year-to-date as of the close of trading on Wednesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates TripAdvisor as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, increase in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 19.8%. Since the same quarter one year prior, revenues rose by 35.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.30, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, TRIP has a quick ratio of 1.87, which demonstrates the ability of the company to cover short-term liquidity needs.
  • TRIPADVISOR INC reported significant earnings per share improvement 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. We feel that this trend should continue. During the past fiscal year, TRIPADVISOR INC increased its bottom line by earning $1.56 versus $1.41 in the prior year. This year, the market expects an improvement in earnings ($2.23 versus $1.56).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet & Catalog Retail industry. The net income increased by 77.6% when compared to the same quarter one year prior, rising from $20.27 million to $36.00 million.
  • The gross profit margin for TRIPADVISOR INC is currently very high, coming in at 95.83%. Regardless of TRIP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TRIP's net profit margin of 12.50% significantly outperformed against the industry.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

If you liked this article you might like

Dow Jumps Over 300 Points, Posting Its Fifth Straight Day of Gains

Dow Jumps Over 300 Points, Posting Its Fifth Straight Day of Gains

Cisco, Warren Buffett and Apple, McDonald's - 5 Things You Must Know

Cisco, Warren Buffett and Apple, McDonald's - 5 Things You Must Know

Sabre Offers Upside Momentum

Sabre Offers Upside Momentum

Countries Where U.S. Travelers Can Still Get a Great Exchange-Rate Deal

Countries Where U.S. Travelers Can Still Get a Great Exchange-Rate Deal

S&P, Nasdaq Retreat From Records as Tax Talk Keeps Markets on Edge

S&P, Nasdaq Retreat From Records as Tax Talk Keeps Markets on Edge