Trade-Ideas LLC identified Dr Pepper Snapple Group ( DPS) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Dr Pepper Snapple Group as such a stock due to the following factors:

  • DPS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $119.3 million.
  • DPS has traded 147,785 shares today.
  • DPS is trading at 2.62 times the normal volume for the stock at this time of day.
  • DPS crossed below its 200-day simple moving average.

'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.

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More details on DPS:

Dr Pepper Snapple Group, Inc. operates as a brand owner, manufacturer, and distributor of non-alcoholic beverages in the United States, Mexico, and Canada. The company operates through three segments: Beverage Concentrates, Packaged Beverages, and Latin America Beverages. The stock currently has a dividend yield of 2.3%. DPS has a PE ratio of 23. Currently there are 3 analysts that rate Dr Pepper Snapple Group a buy, 1 analyst rates it a sell, and 10 rate it a hold.

The average volume for Dr Pepper Snapple Group has been 1.6 million shares per day over the past 30 days. Dr Pepper Snapple Group has a market cap of $17.1 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 0.61 and a short float of 4.6% with 6.23 days to cover. Shares are down 2.1% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Dr Pepper Snapple Group as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, solid stock price performance, growth in earnings per share and increase in net income. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 9.9%. Since the same quarter one year prior, revenues slightly increased by 2.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • DR PEPPER SNAPPLE GROUP INC has improved earnings per share by 26.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DR PEPPER SNAPPLE GROUP INC increased its bottom line by earning $3.97 versus $3.57 in the prior year. This year, the market expects an improvement in earnings ($4.30 versus $3.97).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Beverages industry. The net income increased by 23.3% when compared to the same quarter one year prior, going from $150.00 million to $185.00 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Beverages industry and the overall market, DR PEPPER SNAPPLE GROUP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.

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