Trade-Ideas LLC identified Spirit Airlines ( SAVE) 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 Spirit Airlines as such a stock due to the following factors:

  • SAVE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $89.2 million.
  • SAVE has traded 236,465 shares today.
  • SAVE traded in a range 234.3% of the normal price range with a price range of $4.15.
  • SAVE traded below its daily resistance level (quality: 6 days, meaning that the stock is crossing a resistance level set by the last 6 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 SAVE:

Spirit Airlines, Inc. provides low-fare airline services. As of June 30, 2015, it operated approximately 360 daily flights to 57 destinations in the United States, Caribbean, and Latin America. SAVE has a PE ratio of 1. Currently there are 7 analysts that rate Spirit Airlines a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Spirit Airlines has been 1.9 million shares per day over the past 30 days. Spirit Airlines has a market cap of $3.0 billion and is part of the services sector and transportation industry. The stock has a beta of 1.22 and a short float of 6.5% with 1.75 days to cover. Shares are down 43.1% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Spirit Airlines as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.4%. Since the same quarter one year prior, revenues rose by 10.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.48, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, SAVE has a quick ratio of 1.67, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has increased to $69.41 million or 11.66% when compared to the same quarter last year. Despite an increase in cash flow of 11.66%, SPIRIT AIRLINES INC is still growing at a significantly lower rate than the industry average of 139.37%.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Airlines industry average, but is greater than that of the S&P 500. The net income increased by 44.9% when compared to the same quarter one year prior, rising from $67.00 million to $97.11 million.
  • SAVE'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 49.04%, 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. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

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