Trade-Ideas LLC identified National Oilwell Varco ( NOV) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified National Oilwell Varco as such a stock due to the following factors:

  • NOV has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $176.5 million.
  • NOV has traded 1.0 million shares today.
  • NOV is trading at 5.32 times the normal volume for the stock at this time of day.
  • NOV is trading at a new low 3.00% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on NOV:

National Oilwell Varco, Inc. designs, manufactures, and sells equipment and components used in oil and gas drilling, completion, and production; and provides oilfield services to the upstream oil and gas industry worldwide. The stock currently has a dividend yield of 4.9%. NOV has a PE ratio of 8. Currently there are 7 analysts that rate National Oilwell Varco a buy, 3 analysts rate it a sell, and 15 rate it a hold.

The average volume for National Oilwell Varco has been 6.3 million shares per day over the past 30 days. National Oilwell Varco has a market cap of $14.4 billion and is part of the basic materials sector and energy industry. The stock has a beta of 0.99 and a short float of 9% with 7.02 days to cover. Shares are down 45.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates National Oilwell Varco as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including poor profit margins, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • NOV's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.06, which illustrates the ability to avoid short-term cash problems.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 31.2%. Since the same quarter one year prior, revenues fell by 25.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for NATIONAL OILWELL VARCO INC is currently lower than what is desirable, coming in at 26.71%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 7.39% trails that of the industry average.
  • Net operating cash flow has significantly decreased to $194.00 million or 77.72% 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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