Terex (TEX) 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 Terex ( TEX) 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 Terex as such a stock due to the following factors:

  • TEX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $37.6 million.
  • TEX has traded 84,062 shares today.
  • TEX traded in a range 205.9% of the normal price range with a price range of $1.76.
  • TEX traded below its daily resistance level (quality: 137 days, meaning that the stock is crossing a resistance level set by the last 137 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 TEX with the Ticky from Trade-Ideas. See the FREE profile for TEX NOW at Trade-Ideas

More details on TEX:

Terex Corporation operates as a lifting and material handling solutions company. The stock currently has a dividend yield of 1%. TEX has a PE ratio of 13. Currently there are 7 analysts that rate Terex a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for Terex has been 2.0 million shares per day over the past 30 days. Terex has a market cap of $2.6 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 2.92 and a short float of 5.4% with 3.30 days to cover. Shares are down 10.8% year-to-date as of the close of trading on Friday.

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 Terex as a hold. The company's strengths can be seen in multiple areas, such as its reasonable 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 unimpressive growth in net income, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 11.3%. Since the same quarter one year prior, revenues slightly dropped by 9.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Even though the current debt-to-equity ratio is 1.07, it is still below the industry average, suggesting that this level of debt is acceptable within the Machinery industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.88 is weak.
  • Net operating cash flow has significantly decreased to -$110.70 million or 539.28% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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 Machinery industry. The net income has significantly decreased by 97.1% when compared to the same quarter one year ago, falling from $35.00 million to $1.00 million.

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.

If you liked this article you might like

Jim Cramer: Good Cyclical Stocks to Buy Are in Short Supply

Jim Cramer: Good Cyclical Stocks to Buy Are in Short Supply

6 Stocks Like Caterpillar Will Boom During 2018's New Industrial Revolution

6 Stocks Like Caterpillar Will Boom During 2018's New Industrial Revolution

Irma and Harvey Busted Algos; Probably Done Deals Under Trump: Best of Cramer

Irma and Harvey Busted Algos; Probably Done Deals Under Trump: Best of Cramer

Cramer: Irma and Harvey Busted the Algos

Cramer: Irma and Harvey Busted the Algos

These Stocks Could Soar if and When Trump's Infrastructure Package Becomes a Reality

These Stocks Could Soar if and When Trump's Infrastructure Package Becomes a Reality