Pre-Market Activity Shows Heavy Volume And Movement For Royal Dutch Shell (RDS.B)

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 Royal Dutch Shell ( RDS.B) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Royal Dutch Shell as such a stock due to the following factors:

  • RDS.B has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $58.8 million.
  • RDS.B traded 422,551 shares today in the pre-market hours as of 8:30 AM, representing 45.3% of its average daily volume.

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More details on RDS.B:

Royal Dutch Shell plc operates as an independent oil and gas company worldwide. It operates through Upstream and Downstream segments. The company explores for and extracts crude oil, natural gas, and natural gas liquids. The stock currently has a dividend yield of 6.1%. RDS.B has a PE ratio of 8.

The average volume for Royal Dutch Shell has been 1.6 million shares per day over the past 30 days. Royal Dutch Shell has a market cap of $196.5 billion and is part of the basic materials sector and energy industry. Shares are down 10.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Royal Dutch Shell as a hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, weak operating cash flow and poor profit margins.

Highlights from the ratings report include:
  • RDS.B's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.90 is somewhat weak and could be cause for future problems.
  • ROYAL DUTCH SHELL PLC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ROYAL DUTCH SHELL PLC reported lower earnings of $4.70 versus $5.18 in the prior year. This year, the market expects an improvement in earnings ($7.22 versus $4.70).
  • Net operating cash flow has decreased to $7,106.00 million or 49.18% when compared to the same quarter last year. Despite a decrease in cash flow of 49.18%, ROYAL DUTCH SHELL PLC is in line with the industry average cash flow growth rate of -53.10%.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, RDS.B has underperformed the S&P 500 Index, declining 24.65% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

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