Alcatel-Lucent (ALU) Moving On Heavy Volume In The Pre-Market Hours

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 Alcatel-Lucent ( ALU) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Alcatel-Lucent as such a stock due to the following factors:

  • ALU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $58.4 million.
  • ALU traded 2.9 million shares today in the pre-market hours as of 8:24 AM, representing 19.1% of its average daily volume.

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More details on ALU:

Alcatel-Lucent provides Internet protocol (IP) and cloud networking, and ultra- broadband access worldwide. Currently there is 1 analyst that rates Alcatel-Lucent a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Alcatel-Lucent has been 11.3 million shares per day over the past 30 days. Alcatel-Lucent has a market cap of $9.8 billion and is part of the technology sector and telecommunications industry. Shares are down 2.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Alcatel-Lucent as a hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and weak operating cash flow.

Highlights from the ratings report include:
  • ALCATEL-LUCENT 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. This trend suggests that the performance of the business is improving. During the past fiscal year, ALCATEL-LUCENT continued to lose money by earning -$0.02 versus -$0.74 in the prior year. This year, the market expects an improvement in earnings ($0.21 versus -$0.02).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 133.0% when compared to the same quarter one year prior, rising from $149.55 million to $348.44 million.
  • 38.74% is the gross profit margin for ALCATEL-LUCENT which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 8.80% trails the industry average.
  • Net operating cash flow has decreased to $514.31 million or 23.28% when compared to the same quarter last year. Despite a decrease in cash flow of 23.28%, ALCATEL-LUCENT is still significantly exceeding the industry average of -79.28%.
  • The debt-to-equity ratio is very high at 2.84 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, ALU's quick ratio is somewhat strong at 1.06, demonstrating the ability to handle short-term liquidity needs.

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