Unit (UNT) Is Today's Strong On High Volume Stock

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

  • UNT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.9 million.
  • UNT has traded 154,557 shares today.
  • UNT is trading at 2.83 times the normal volume for the stock at this time of day.
  • UNT is trading at a new high 4.01% 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 UNT:

Unit Corporation, together with its subsidiaries, operates as an oil and natural gas contract drilling company primarily in the United States. The company operates through three segments: Oil and Natural Gas, Contract Drilling, and Mid-Stream. Currently there are 4 analysts that rate Unit a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Unit has been 1.1 million shares per day over the past 30 days. Unit has a market cap of $839.2 million and is part of the basic materials sector and energy industry. The stock has a beta of 3.09 and a short float of 15.4% with 6.44 days to cover. Shares are up 12.3% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Unit as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and poor profit margins.

Highlights from the ratings report include:
  • 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, UNIT CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to $70.71 million or 55.88% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The gross profit margin for UNIT CORP is currently extremely low, coming in at 4.29%. Despite the low profit margin, it has increased significantly from the same period last year.
  • UNT's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 42.63%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
  • UNT, with its decline in revenue, underperformed when compared the industry average of 35.8%. Since the same quarter one year prior, revenues fell by 46.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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