Trade-Ideas: Diana Shipping (DSX) Is Today's Weak On High Relative 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 Diana Shipping ( DSX) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Diana Shipping as such a stock due to the following factors:

  • DSX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.8 million
  • DSX has traded 232,232 shares today
  • DSX is trading at 3.33 times the normal volume for the stock at this time of day
  • DSX is trading at a new low 4.01069772687009962197635104530490934848785400390625 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 DSX:

Diana Shipping Inc. provides shipping transportation services. The company transports dry bulk cargoes, including commodities, such as iron ore, coal, grain, and other materials in shipping routes worldwide. Currently there are six analysts that rate Diana Shipping a buy, no analysts rate it a sell, and five rate it a hold.

The average volume for Diana Shipping has been 606,800 shares per day over the past 30 days. Diana Shipping has a market cap of $613.1 million and is part of the services sector and transportation industry. The stock has a beta of 1.35 and a short float of 4.7% with 4.77 days to cover. Shares are up 11.5% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Diana Shipping as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • 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 Marine industry. The net income has significantly decreased by 78.6% when compared to the same quarter one year ago, falling from -$6.03 million to -$10.76 million.
  • Net operating cash flow has decreased to $8.43 million or 12.49% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, DIANA SHIPPING INC has marginally lower results.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 31.85%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 87.50% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • DIANA SHIPPING INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, DIANA SHIPPING INC continued to lose money by earning -$0.19 versus -$0.26 in the prior year. For the next year, the market is expecting a contraction of 263.1% in earnings (-$0.69 versus -$0.19).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Marine industry and the overall market, DIANA SHIPPING INC's return on equity significantly trails that of both the industry average and the S&P 500.

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