Alcatel-Lucent (ALU) Moving On Heavy Volume In The Pre-Market Hours

Trade-Ideas LLC identified Alcatel-Lucent ( ALU) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Alcatel-Lucent as such a stock due to the following factors:

  • ALU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.9 million.
  • ALU traded 668,460 shares today in the pre-market hours as of 9:05 AM, representing 15.1% of its average daily volume.

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More details on ALU:

Alcatel-Lucent provides Internet protocol (IP) and cloud networking, and ultra- broadband access worldwide. Currently there are 4 analysts that rate Alcatel-Lucent a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Alcatel-Lucent has been 4.2 million shares per day over the past 30 days. Alcatel-Lucent has a market cap of $9.7 billion and is part of the technology sector and telecommunications industry. Shares are down 0.6% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Alcatel-Lucent as a hold. 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 and good cash flow from operations. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:
  • ALCATEL-LUCENT 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. This trend suggests that the performance of the business is improving. During the past fiscal year, ALCATEL-LUCENT continued to lose money by earning -$0.02 versus -$0.74 in the prior year. This year, the market expects an improvement in earnings ($0.14 versus -$0.02).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 84.5% when compared to the same quarter one year prior, rising from -$407.33 million to -$63.21 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Communications Equipment industry and the overall market on the basis of return on equity, ALCATEL-LUCENT has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Compared to where it was trading a year ago, ALU's share price has not changed very much due to (a) the relatively weak year-over-year performance of the overall market, (b) the company's stagnant earnings, and (c) other mixed results. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • The debt-to-equity ratio is very high at 2.30 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, ALU's quick ratio is somewhat strong at 1.05, demonstrating the ability to handle short-term liquidity needs.

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