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 Nordic American Tankers ( NAT) 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 Nordic American Tankers as such a stock due to the following factors:

  • NAT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $44.2 million.
  • NAT has traded 1.0 million shares today.
  • NAT traded in a range 213.1% of the normal price range with a price range of $1.16.
  • NAT traded below its daily resistance level (quality: 9 days, meaning that the stock is crossing a resistance level set by the last 9 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 NAT:

Nordic American Tankers Limited, a tanker company, engages in acquiring and chartering double-hull tankers. As of December 31, 2014, it owned 24 Suezmax crude oil tankers, including two new buildings under construction. The company was founded in 1995 and is based in Hamilton, Bermuda. The stock currently has a dividend yield of 6.6%. Currently there are 2 analysts that rate Nordic American Tankers a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Nordic American Tankers has been 1.8 million shares per day over the past 30 days. Nordic American Tankers has a market cap of $1.5 billion and is part of the services sector and transportation industry. The stock has a beta of 1.21 and a short float of 8.8% with 2.67 days to cover. Shares are up 69.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Nordic American Tankers as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • NORDIC AMERICAN TANKERS LTD 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, NORDIC AMERICAN TANKERS LTD continued to lose money by earning -$0.15 versus -$1.67 in the prior year. This year, the market expects an improvement in earnings ($1.04 versus -$0.15).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 659.9% when compared to the same quarter one year prior, rising from $3.99 million to $30.32 million.
  • NAT's debt-to-equity ratio is very low at 0.28 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 6.95, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for NORDIC AMERICAN TANKERS LTD is currently very high, coming in at 76.80%. It has increased significantly from the same period last year. Along with this, the net profit margin of 43.58% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 70.72% to $40.66 million when compared to the same quarter last year. In addition, NORDIC AMERICAN TANKERS LTD has also vastly surpassed the industry average cash flow growth rate of -53.44%.

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