Trade-Ideas LLC identified Owens-Illinois ( OI) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Owens-Illinois as such a stock due to the following factors:

  • OI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $36.9 million.
  • OI has traded 268,378 shares today.
  • OI is down 3.3% today.
  • OI was up 10% yesterday.

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More details on OI:

Owens-Illinois, Inc., through its subsidiaries, manufactures and sells glass container products to food and beverage manufacturers primarily in Europe, North America, Latin America, and the Asia Pacific. Currently there are 2 analysts that rate Owens-Illinois a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Owens-Illinois has been 2.0 million shares per day over the past 30 days. Owens-Illinois has a market cap of $2.0 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.77 and a short float of 3.8% with 2.57 days to cover. Shares are down 22.3% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Owens-Illinois as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • The debt-to-equity ratio is very high at 9.71 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.45, which clearly demonstrates the inability to cover short-term cash needs.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Containers & Packaging industry and the overall market, OWENS-ILLINOIS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for OWENS-ILLINOIS INC is currently lower than what is desirable, coming in at 26.38%. Regardless of OI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, OI's net profit margin of -12.42% significantly underperformed when compared to the industry average.
  • Looking at the price performance of OI's shares over the past 12 months, there is not much good news to report: the stock is down 50.80%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier 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.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Containers & Packaging industry average. The net income has decreased by 1.0% when compared to the same quarter one year ago, dropping from -$200.00 million to -$202.00 million.

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