Teekay Tankers (TNK) Is Strong 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 Teekay Tankers ( TNK) as a strong 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 $13.0 million.
  • TNK has traded 376,482 shares today.
  • TNK is trading at 5.68 times the normal volume for the stock at this time of day.
  • TNK is trading at a new high 3.03% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 1.8%. TNK has a PE ratio of 1. Currently there are 3 analysts that rate Teekay Tankers a buy, no analysts rate it a sell, and 6 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 $648.3 million and is part of the services sector and transportation industry. The stock has a beta of 2.83 and a short float of 6.5% with 2.86 days to cover. Shares are up 37% year-to-date as of the close of trading on Thursday.

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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 growth in earnings per share. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:
  • TNK's very impressive revenue growth greatly exceeded the industry average of 38.3%. Since the same quarter one year prior, revenues leaped by 97.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 81.49% over the past year, a rise that has exceeded that of the S&P 500 Index. 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.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, TEEKAY TANKERS LTD's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The debt-to-equity ratio of 1.41 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, TNK has a quick ratio of 0.68, this demonstrates the lack of ability of the company to cover short-term liquidity needs.

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