Golar LNG (GLNG) Is Today's Strong 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 Golar LNG ( GLNG) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Golar LNG as such a stock due to the following factors:

  • GLNG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $75.4 million.
  • GLNG has traded 171,178 shares today.
  • GLNG is trading at 2.31 times the normal volume for the stock at this time of day.
  • GLNG is trading at a new high 3.18% 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 GLNG:

Golar LNG Limited, a midstream liquefied natural gas (LNG) company, engages in the transportation, regasification, liquefaction, and trading of LNG. The company operates in three segments: Vessel Operations, LNG Trading, and FLNG. The stock currently has a dividend yield of 3.8%. GLNG has a PE ratio of 3. Currently there are 5 analysts that rate Golar LNG a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Golar LNG has been 1.7 million shares per day over the past 30 days. Golar LNG has a market cap of $4.5 billion and is part of the services sector and transportation industry. The stock has a beta of 0.75 and a short float of 7.1% with 4.58 days to cover. Shares are up 31.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Golar LNG as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and solid stock price performance. 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:
  • GLNG's very impressive revenue growth greatly exceeded the industry average of 38.5%. Since the same quarter one year prior, revenues leaped by 78.5%. 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.
  • Net operating cash flow has increased to $13.49 million or 31.62% when compared to the same quarter last year. In addition, GOLAR LNG LTD has also vastly surpassed the industry average cash flow growth rate of -53.34%.
  • The debt-to-equity ratio is somewhat low, currently at 0.61, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.85 is somewhat weak and could be cause for future problems.
  • 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 1019.8% when compared to the same quarter one year ago, falling from $4.31 million to -$39.65 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, GOLAR LNG LTD's return on equity significantly trails that of both the industry average and the S&P 500.

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