Trade-Ideas LLC identified Owens-Illinois ( OI) as a weak on high relative volume 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 $42.2 million.
  • OI has traded 238,946 shares today.
  • OI is trading at 3.27 times the normal volume for the stock at this time of day.
  • OI is trading at a new low 5.05% 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 OI:

Owens-Illinois, Inc., through its subsidiaries, manufactures and sells glass containers 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 2.6 million shares per day over the past 30 days. Owens-Illinois has a market cap of $2.4 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.70 and a short float of 4.5% with 2.67 days to cover. Shares are down 13.6% year-to-date as of the close of trading on Monday.

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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 11.96 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, OI has a quick ratio of 0.54, this demonstrates the lack of ability of the company to cover short-term liquidity 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 41.06%, 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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