Trade-Ideas LLC identified Bank of Nova Scotia ( BNS) 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 Bank of Nova Scotia as such a stock due to the following factors:

  • BNS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $33.3 million.
  • BNS has traded 481,594 shares today.
  • BNS traded in a range 206.4% of the normal price range with a price range of $1.29.
  • BNS traded below its daily resistance level (quality: 73 days, meaning that the stock is crossing a resistance level set by the last 73 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 BNS:

The Bank of Nova Scotia provides various personal, commercial, corporate, and investment banking services in Canada and internationally. The stock currently has a dividend yield of 4.7%. BNS has a PE ratio of 1. Currently there are 2 analysts that rate Bank of Nova Scotia a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Bank of Nova Scotia has been 789,300 shares per day over the past 30 days. Bank of Nova Scotia has a market cap of $53.4 billion and is part of the financial sector and banking industry. Shares are down 22.1% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Bank of Nova Scotia as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • Net operating cash flow has significantly decreased to -$7,712.00 million or 237.15% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • BNS's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 26.81%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Commercial Banks industry and the overall market, BANK OF NOVA SCOTIA's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for BANK OF NOVA SCOTIA is currently very high, coming in at 72.71%. 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 22.40% trails the industry average.
  • BANK OF NOVA SCOTIA has improved earnings per share by 31.8% in the most recent quarter compared to the same quarter a year ago. Stable Earnings per share over the past year indicate the company has sound management over its earnings and share float. During the past fiscal year, BANK OF NOVA SCOTIA increased its bottom line by earning $5.67 versus $5.66 in the prior year.

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