Trade-Ideas LLC identified Flowserve ( FLS) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Flowserve as such a stock due to the following factors:

  • FLS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $51.9 million.
  • FLS has traded 758,736 shares today.
  • FLS traded in a range 211.6% of the normal price range with a price range of $2.28.
  • FLS traded below its daily resistance level (quality: 31 days, meaning that the stock is crossing a resistance level set by the last 31 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in FLS with the Ticky from Trade-Ideas. See the FREE profile for FLS NOW at Trade-Ideas

More details on FLS:

Flowserve Corporation designs, manufactures, distributes, and services industrial flow management equipment worldwide. The company operates through three segments: Engineered Product Division (EPD), Industrial Product Division (IPD), and Flow Control Division (FCD). The stock currently has a dividend yield of 1.5%. FLS has a PE ratio of 24. Currently there are 3 analysts that rate Flowserve a buy, 1 analyst rates it a sell, and 13 rate it a hold.

The average volume for Flowserve has been 1.1 million shares per day over the past 30 days. Flowserve has a market cap of $6.5 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.51 and a short float of 5% with 4.93 days to cover. Shares are up 19.5% year-to-date as of the close of trading on Thursday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Flowserve as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, good cash flow from operations and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and disappointing return on equity.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 36.8% when compared to the same quarter one year prior, rising from $27.67 million to $37.86 million.
  • Net operating cash flow has significantly increased by 91.42% to -$8.00 million when compared to the same quarter last year. In addition, FLOWSERVE CORP has also vastly surpassed the industry average cash flow growth rate of -9.94%.
  • FLOWSERVE CORP has improved earnings per share by 45.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, FLOWSERVE CORP reported lower earnings of $2.00 versus $3.77 in the prior year. This year, the market expects an improvement in earnings ($2.50 versus $2.00).
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Machinery industry and the overall market on the basis of return on equity, FLOWSERVE CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • FLS has underperformed the S&P 500 Index, declining 7.42% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.