Trade-Ideas LLC identified Diamond Offshore Drilling ( DO) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Diamond Offshore Drilling as such a stock due to the following factors:

  • DO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $50.7 million.
  • DO has traded 228,458 shares today.
  • DO is trading at 3.95 times the normal volume for the stock at this time of day.
  • DO is trading at a new low 3.02% 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 DO:

Diamond Offshore Drilling, Inc. provides contract drilling services to the energy industry worldwide. The company provides services in floater market, such as ultra-deepwater, deepwater, and mid-water; and non-floater or jack-up market. The stock currently has a dividend yield of 2.3%. DO has a PE ratio of 42. Currently there is 1 analyst that rates Diamond Offshore Drilling a buy, 7 analysts rate it a sell, and 10 rate it a hold.

The average volume for Diamond Offshore Drilling has been 2.9 million shares per day over the past 30 days. has a market cap of $3.0 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.05 and a short float of 20.1% with 5.22 days to cover. Shares are down 42.3% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Diamond Offshore Drilling as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 159.1% when compared to the same quarter one year prior, rising from $52.65 million to $136.42 million.
  • Despite the weak revenue results, DO has outperformed against the industry average of 31.1%. Since the same quarter one year prior, revenues fell by 17.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Net operating cash flow has decreased to $265.83 million or 15.74% when compared to the same quarter last year. Despite a decrease in cash flow of 15.74%, DIAMOND OFFSHRE DRILLING INC is in line with the industry average cash flow growth rate of -18.89%.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Energy Equipment & Services industry and the overall market on the basis of return on equity, DIAMOND OFFSHRE DRILLING INC underperformed against that of the industry average and is significantly less than that of the S&P 500.

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