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

  • TNK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.2 million.
  • TNK has traded 292,718 shares today.
  • TNK is trading at 4.55 times the normal volume for the stock at this time of day.
  • TNK is trading at a new low 3.05% 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 TNK:

Teekay Tankers Ltd. is engaged in the marine transportation of crude oil and refined petroleum products through the operation of its oil and product tankers worldwide. The stock currently has a dividend yield of 1.9%. TNK has a PE ratio of 9.4. Currently there are 3 analysts that rate Teekay Tankers a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Teekay Tankers has been 1.1 million shares per day over the past 30 days. Teekay Tankers has a market cap of $592.1 million and is part of the services sector and transportation industry. Shares are up 22.7% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Teekay Tankers as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and weak operating cash flow.

Highlights from the ratings report include:
  • TNK's very impressive revenue growth greatly exceeded the industry average of 37.8%. Since the same quarter one year prior, revenues leaped by 89.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Powered by its strong earnings growth of 29.41% and other important driving factors, this stock has surged by 89.32% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • Net operating cash flow has decreased to $4.97 million or 15.48% when compared to the same quarter last year. Despite a decrease in cash flow TEEKAY TANKERS LTD is still fairing well by exceeding its industry average cash flow growth rate of -51.31%.
  • The debt-to-equity ratio of 1.44 is relatively high when compared with the industry average, suggesting a need for better debt level management. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 3.07, which shows the ability to cover short-term cash needs.

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