Strong On High Relative Volume: Precision Drilling (PDS)

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

  • PDS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $11.9 million.
  • PDS has traded 284,571 shares today.
  • PDS is trading at 2.14 times the normal volume for the stock at this time of day.
  • PDS is trading at a new high 5.08% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 PDS:

Precision Drilling Corporation provides oil and natural gas drilling and related services and products. The company operates in two segments, Contract Drilling Services; and Completion and Production Services. The stock currently has a dividend yield of 7.7%. Currently there are 4 analysts that rate Precision Drilling a buy, 2 analysts rate it a sell, and 5 rate it a hold.

The average volume for Precision Drilling has been 2.9 million shares per day over the past 30 days. Precision has a market cap of $1.3 billion and is part of the basic materials sector and energy industry. Shares are up 19.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

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

Highlights from the ratings report include:
  • PRECISION DRILLING CORP 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. During the past fiscal year, PRECISION DRILLING CORP swung to a loss, reporting -$1.25 versus $0.12 in the prior year.
  • 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 182.7% when compared to the same quarter one year ago, falling from $24.03 million to -$19.88 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, PRECISION DRILLING CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 34.60%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 187.50% 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.
  • Net operating cash flow has decreased to $112.17 million or 47.85% when compared to the same quarter last year. Despite a decrease in cash flow PRECISION DRILLING CORP is still fairing well by exceeding its industry average cash flow growth rate of -92.92%.

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