Trade-Ideas LLC identified Ocean Rig UDW ( ORIG) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Ocean Rig UDW as such a stock due to the following factors:

  • ORIG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.8 million.
  • ORIG has traded 823,772 shares today.
  • ORIG is trading at 3.14 times the normal volume for the stock at this time of day.
  • ORIG is trading at a new low 8.24% 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 ORIG:

Ocean Rig UDW Inc., an offshore drilling contractor, provides oilfield services for offshore oil and gas exploration, development, and production drilling worldwide. It specializes in the ultra-deepwater and harsh-environment segment of the offshore drilling industry. ORIG has a PE ratio of 5. Currently there is 1 analyst that rates Ocean Rig UDW a buy, 3 analysts rate it a sell, and 1 rates it a hold.

The average volume for Ocean Rig UDW has been 2.6 million shares per day over the past 30 days. Ocean Rig UDW has a market cap of $422.9 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.69 and a short float of 7.7% with 3.14 days to cover. Shares are up 70.9% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Ocean Rig UDW as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 35.8%. Since the same quarter one year prior, revenues rose by 26.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • OCEAN RIG UDW INC reported significant earnings per share improvement 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, OCEAN RIG UDW INC reported lower earnings of $0.53 versus $1.97 in the prior year. This year, the market expects an improvement in earnings ($2.35 versus $0.53).
  • The debt-to-equity ratio of 1.14 is relatively high when compared with the industry average, suggesting a need for better debt level management. Regardless of the company's weak debt-to-equity ratio, ORIG has managed to keep a strong quick ratio of 2.38, which demonstrates the ability to cover short-term cash needs.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Energy Equipment & Services industry and the overall market on the basis of return on equity, OCEAN RIG UDW INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

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