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 $60.3 million.
  • DO has traded 310,884 shares today.
  • DO is trading at 2.41 times the normal volume for the stock at this time of day.
  • DO is trading at a new low 3.12% 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. It provides services in floater market, including ultra-deepwater, deepwater, and mid-water. The stock currently has a dividend yield of 3%. Currently there are no analysts that rate Diamond Offshore Drilling a buy, 5 analysts rate it a sell, and 11 rate it a hold.

The average volume for Diamond Offshore Drilling has been 2.6 million shares per day over the past 30 days. has a market cap of $3.1 billion and is part of the basic materials sector and energy industry. The stock has a beta of 0.98 and a short float of 25.9% with 6.95 days to cover. Shares are up 12.4% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Diamond Offshore Drilling as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Energy Equipment & Services industry. The net income has significantly decreased by 348.3% when compared to the same quarter one year ago, falling from $98.84 million to -$245.38 million.
  • 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 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.
  • Net operating cash flow has decreased to $269.75 million or 12.98% when compared to the same quarter last year. Despite a decrease in cash flow DIAMOND OFFSHRE DRILLING INC is still fairing well by exceeding its industry average cash flow growth rate of -42.31%.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 25.03%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 348.61% compared to the year-earlier 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.
  • DIAMOND OFFSHRE DRILLING INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, DIAMOND OFFSHRE DRILLING INC swung to a loss, reporting -$2.00 versus $2.80 in the prior year. This year, the market expects an improvement in earnings ($0.90 versus -$2.00).

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