Trade-Ideas LLC identified XPO Logistics ( XPO) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified XPO Logistics as such a stock due to the following factors:

  • XPO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $95.2 million.
  • XPO has traded 656,319 shares today.
  • XPO is down 3.1% today.
  • XPO was up 6.6% yesterday.

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More details on XPO:

XPO Logistics, Inc. provides transportation and logistics services primarily in the United States. The company operates through two segments, Transportation and Logistics. Currently there are 11 analysts that rate XPO Logistics a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for XPO Logistics has been 1.6 million shares per day over the past 30 days. XPO Logistics has a market cap of $2.9 billion and is part of the services sector and transportation industry. The stock has a beta of 1.43 and a short float of 27.4% with 6.50 days to cover. Shares are down 21.1% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates XPO Logistics as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, 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 deteriorating net income, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • XPO's very impressive revenue growth greatly exceeded the industry average of 0.5%. Since the same quarter one year prior, revenues leaped by 109.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Even though the current debt-to-equity ratio is 1.34, it is still below the industry average, suggesting that this level of debt is acceptable within the Air Freight & Logistics industry. Despite the fact that XPO's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.74 is high and demonstrates strong liquidity.
  • 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 Air Freight & Logistics industry. The net income has significantly decreased by 440.6% when compared to the same quarter one year ago, falling from -$13.76 million to -$74.40 million.
  • Net operating cash flow has significantly decreased to -$70.50 million or 294.64% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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