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 $75.5 million.
  • RSG has traded 124,934 shares today.
  • RSG is trading at 2.08 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.

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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 2.9%. RSG has a PE ratio of 24. 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 1.6 million shares per day over the past 30 days. Republic Services has a market cap of $14.5 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 0.70 and a short float of 4.2% with 5.51 days to cover. Shares are up 2.3% year-to-date as of the close of trading on Monday.

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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, reasonable valuation levels, expanding profit margins, good cash flow from operations and increase in net income. 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 4.5%. 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.
  • 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 17.20%.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Commercial Services & Supplies industry average. The net income increased by 6.3% when compared to the same quarter one year prior, going from $179.00 million to $190.30 million.

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