Trade-Ideas LLC identified Sealed Air ( SEE) 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 Sealed Air as such a stock due to the following factors:

  • SEE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $113.5 million.
  • SEE has traded 315,063 shares today.
  • SEE is trading at 2.00 times the normal volume for the stock at this time of day.
  • SEE 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 SEE:

Sealed Air Corporation provides food safety and security, facility hygiene, and product protection solutions worldwide. The stock currently has a dividend yield of 1.1%. SEE has a PE ratio of 37. Currently there are 2 analysts that rate Sealed Air a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Sealed Air has been 2.3 million shares per day over the past 30 days. Sealed Air has a market cap of $10.1 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.51 and a short float of 2.6% with 2.38 days to cover. Shares are up 17.5% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Sealed Air as a buy. 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, notable return on equity, expanding profit margins and solid stock price performance. 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:
  • SEALED AIR CORP 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, SEALED AIR CORP increased its bottom line by earning $1.20 versus $0.44 in the prior year. This year, the market expects an improvement in earnings ($2.32 versus $1.20).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Containers & Packaging industry. The net income increased by 45.0% when compared to the same quarter one year prior, rising from $59.70 million to $86.60 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 Containers & Packaging industry and the overall market, SEALED AIR CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • 38.21% is the gross profit margin for SEALED AIR CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 4.95% trails the industry average.
  • Powered by its strong earnings growth of 50.00% and other important driving factors, this stock has surged by 41.60% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.

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