Trade-Ideas LLC identified Owens-Corning ( OC) 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 Owens-Corning as such a stock due to the following factors:

  • OC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $82.6 million.
  • OC has traded 2.5 million shares today.
  • OC traded in a range 258.6% of the normal price range with a price range of $3.20.
  • OC traded below its daily resistance level (quality: 1 day, meaning that the stock is crossing a resistance level set by the last 1 calendar day. 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 OC:

Owens Corning, together with its subsidiaries, produces and sells glass fiber reinforcements and other materials for composite systems; and residential and commercial building materials worldwide. It operates in three segments: Composites, Insulation, and Roofing. The stock currently has a dividend yield of 1.5%. OC has a PE ratio of 27. Currently there are 8 analysts that rate Owens-Corning a buy, 1 analyst rates it a sell, and 6 rate it a hold.

The average volume for Owens-Corning has been 1.5 million shares per day over the past 30 days. Owens-Corning has a market cap of $5.2 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 0.98 and a short float of 2.5% with 1.59 days to cover. Shares are up 25.4% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Owens-Corning as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, increase in net income and attractive valuation levels. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • OC's revenue growth has slightly outpaced the industry average of 1.3%. Since the same quarter one year prior, revenues slightly increased by 4.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 327.77% and other important driving factors, this stock has surged by 45.77% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, OC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • OWENS CORNING 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. During the past fiscal year, OWENS CORNING increased its bottom line by earning $1.91 versus $1.71 in the prior year. This year, the market expects an improvement in earnings ($2.20 versus $1.91).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Building Products industry. The net income increased by 333.3% when compared to the same quarter one year prior, rising from $21.00 million to $91.00 million.

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