Trade-Ideas LLC identified ConAgra Foods ( CAG) 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 ConAgra Foods as such a stock due to the following factors:

  • CAG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $111.0 million.
  • CAG has traded 5.1 million shares today.
  • CAG traded in a range 247.7% of the normal price range with a price range of $1.91.
  • CAG traded below its daily resistance level (quality: 95 days, meaning that the stock is crossing a resistance level set by the last 95 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 CAG:

ConAgra Foods, Inc. operates as a food company primarily in North America. The company operates through three segments: Consumer Foods, Commercial Foods, and Private Brands. The stock currently has a dividend yield of 2.4%. Currently there are 3 analysts that rate ConAgra Foods a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for ConAgra Foods has been 3.4 million shares per day over the past 30 days. ConAgra has a market cap of $18.2 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 0.38 and a short float of 1.7% with 2.63 days to cover. Shares are up 16.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates ConAgra Foods as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, solid stock price performance, increase in net income and growth in earnings per share. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 8.4%. Since the same quarter one year prior, revenues slightly increased by 3.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 149.47% and other important driving factors, this stock has surged by 33.55% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food Products industry. The net income increased by 164.5% when compared to the same quarter one year prior, rising from -$324.20 million to $209.20 million.
  • Net operating cash flow has increased to $740.10 million or 21.54% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 9.00%.
  • CONAGRA FOODS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CONAGRA FOODS INC swung to a loss, reporting -$1.46 versus $0.35 in the prior year. This year, the market expects an improvement in earnings ($2.25 versus -$1.46).

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