Wabco Holdings (WBC) Is Today's Water-Logged And Getting Wetter 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 Wabco Holdings ( WBC) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Wabco Holdings as such a stock due to the following factors:

  • WBC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $73.5 million.
  • WBC has traded 800,246 shares today.
  • WBC traded in a range 228.1% of the normal price range with a price range of $4.43.
  • WBC traded below its daily resistance level (quality: 14 days, meaning that the stock is crossing a resistance level set by the last 14 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in WBC with the Ticky from Trade-Ideas. See the FREE profile for WBC NOW at Trade-Ideas

More details on WBC:

WABCO Holdings Inc., together with its subsidiaries, provides electronic, mechanical, and mechatronic products for commercial truck, trailer, bus, and passenger car manufacturers worldwide. WBC has a PE ratio of 27. Currently there are 5 analysts that rate Wabco Holdings a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Wabco Holdings has been 531,500 shares per day over the past 30 days. Wabco has a market cap of $7.7 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 1.86 and a short float of 2% with 2.53 days to cover. Shares are up 26.2% year-to-date as of the close of trading on Wednesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Wabco Holdings as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Machinery industry average. The net income increased by 3.6% when compared to the same quarter one year prior, going from $69.40 million to $71.90 million.
  • The current debt-to-equity ratio, 0.47, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, WBC has a quick ratio of 2.16, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 36.57% is the gross profit margin for WABCO HOLDINGS INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 11.02% is above that of the industry average.
  • Net operating cash flow has significantly increased by 88.45% to $86.50 million when compared to the same quarter last year. In addition, WABCO HOLDINGS INC has also vastly surpassed the industry average cash flow growth rate of -31.43%.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

More from Markets

Facebook, Amazon, Microsoft and Ford - 5 Things You Must Know

Facebook, Amazon, Microsoft and Ford - 5 Things You Must Know

Facebook Set for Biggest Gain in Two Years After Q1 Earnings Top Forecasts

Facebook Set for Biggest Gain in Two Years After Q1 Earnings Top Forecasts

Global Stocks Mixed, U.S. Futures Soften as Earnings, Oil, Rates Cloud Sentiment

Global Stocks Mixed, U.S. Futures Soften as Earnings, Oil, Rates Cloud Sentiment

European Automakers Gain on Reports China Mulling Auto Tariff Reduction

European Automakers Gain on Reports China Mulling Auto Tariff Reduction

Deutsche Bank Plans 'Significant' Job Cuts as Q1 Profits Slump

Deutsche Bank Plans 'Significant' Job Cuts as Q1 Profits Slump