Trade-Ideas LLC identified Republic Services ( RSG) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Republic Services as such a stock due to the following factors:

  • RSG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $54.9 million.
  • RSG has traded 148,428 shares today.
  • RSG is trading at 2.81 times the normal volume for the stock at this time of day.
  • RSG crossed below its 200-day simple moving average.

'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in RSG with the Ticky from Trade-Ideas. See the FREE profile for RSG NOW at Trade-Ideas

More details on RSG:

Republic Services, Inc., together with its subsidiaries, provides non-hazardous solid waste collection, transfer, recycling, and disposal services for commercial, industrial, municipal, and residential customers in the United States. It operates through three segments: East, Central, and West. The stock currently has a dividend yield of 2.8%. RSG has a PE ratio of 25. Currently there are 5 analysts that rate Republic Services a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Republic Services has been 1.4 million shares per day over the past 30 days. Republic Services has a market cap of $15.0 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 0.68 and a short float of 3.8% with 6.69 days to cover. Shares are up 4.3% 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 Republic Services as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, reasonable valuation levels, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • RSG's revenue growth has slightly outpaced the industry average of 5.2%. Since the same quarter one year prior, revenues slightly increased by 3.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • 38.55% is the gross profit margin for REPUBLIC SERVICES INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 8.23% is above that of the industry average.
  • Net operating cash flow has increased to $405.10 million or 24.30% when compared to the same quarter last year. In addition, REPUBLIC SERVICES INC has also modestly surpassed the industry average cash flow growth rate of 16.94%.

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.