JetBlue Airways (JBLU) Showing Signs Of Being Water-Logged And Getting Wetter

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 JetBlue Airways ( JBLU) 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 JetBlue Airways as such a stock due to the following factors:

  • JBLU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $175.6 million.
  • JBLU has traded 9.5 million shares today.
  • JBLU traded in a range 469.5% of the normal price range with a price range of $3.54.
  • JBLU traded below its daily resistance level (quality: 130 days, meaning that the stock is crossing a resistance level set by the last 130 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.

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More details on JBLU:

JetBlue Airways Corporation, a passenger carrier company, provides air transportation services. As of December 31, 2014, the company operated a fleet of 13 Airbus A321 aircrafts, 130 Airbus A320 aircrafts, and 60 EMBRAER 190 aircrafts. JBLU has a PE ratio of 13. Currently there are 9 analysts that rate JetBlue Airways a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for JetBlue Airways has been 8.6 million shares per day over the past 30 days. JetBlue Airways has a market cap of $6.4 billion and is part of the services sector and transportation industry. The stock has a beta of 0.73 and a short float of 12.4% with 3.71 days to cover. Shares are up 19.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates JetBlue Airways as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • JBLU's revenue growth has slightly outpaced the industry average of 3.2%. Since the same quarter one year prior, revenues rose by 12.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 3900.00% and other important driving factors, this stock has surged by 98.44% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, JBLU should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • JETBLUE AIRWAYS CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, JETBLUE AIRWAYS CORP increased its bottom line by earning $1.19 versus $0.51 in the prior year. This year, the market expects an improvement in earnings ($1.75 versus $1.19).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Airlines industry. The net income increased by 3325.0% when compared to the same quarter one year prior, rising from $4.00 million to $137.00 million.

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