MasTec (MTZ) Stock: Weak On High Volume Today

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

  • MTZ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $11.6 million.
  • MTZ has traded 156,565 shares today.
  • MTZ is trading at 2.71 times the normal volume for the stock at this time of day.
  • MTZ is trading at a new low 3.02% 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 MTZ:

MasTec, Inc., an infrastructure construction company, provides engineering, building, installation, maintenance, and upgrade services for energy, utility, and communications infrastructure primarily in the United States. MTZ has a PE ratio of 11.5. Currently there are 8 analysts that rate MasTec a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for MasTec has been 991,300 shares per day over the past 30 days. MasTec has a market cap of $1.5 billion and is part of the industrial goods sector and materials & construction industry. Shares are down 18.1% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates MasTec as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.2%. Since the same quarter one year prior, revenues slightly increased by 6.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • MTZ's debt-to-equity ratio of 0.92 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Construction & Engineering industry. The net income has significantly decreased by 46.3% when compared to the same quarter one year ago, falling from $41.50 million to $22.30 million.
  • 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. When compared to other companies in the Construction & Engineering industry and the overall market, MASTEC INC's return on equity is below that of both the industry average and the S&P 500.

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