Today's Weak On High Volume Stock: Oil States International (OIS)

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 Oil States International ( OIS) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Oil States International as such a stock due to the following factors:

  • OIS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $29.4 million.
  • OIS has traded 244,871 shares today.
  • OIS is trading at 8.25 times the normal volume for the stock at this time of day.
  • OIS is trading at a new low 4.04% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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 OIS:

Oil States International, Inc., through its subsidiaries, provides specialty products and services to oil and natural gas companies worldwide. It operates through two segments, Offshore Products and Well Site Services. OIS has a PE ratio of 2. Currently there are 4 analysts that rate Oil States International a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Oil States International has been 940,000 shares per day over the past 30 days. Oil States International has a market cap of $2.2 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.85 and a short float of 4.5% with 3.23 days to cover. Shares are down 13.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Oil States International as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • OIS's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, OIS has a quick ratio of 2.12, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has slightly increased to $114.65 million or 8.86% when compared to the same quarter last year. Despite an increase in cash flow, OIL STATES INTL INC's average is still marginally south of the industry average growth rate of 12.41%.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Energy Equipment & Services industry. The net income has significantly decreased by 72.5% when compared to the same quarter one year ago, falling from $71.10 million to $19.57 million.
  • The gross profit margin for OIL STATES INTL INC is currently lower than what is desirable, coming in at 29.53%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 5.79% trails that of the industry average.

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