Trade-Ideas LLC identified Stericycle ( SRCL) 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 Stericycle as such a stock due to the following factors:

  • SRCL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $69.4 million.
  • SRCL has traded 299,038 shares today.
  • SRCL traded in a range 343.9% of the normal price range with a price range of $4.15.
  • SRCL traded below its daily resistance level (quality: 90 days, meaning that the stock is crossing a resistance level set by the last 90 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.

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More details on SRCL:

Stericycle, Inc., together with its subsidiaries, provides regulated and compliance solutions to the healthcare, retail, and commercial businesses in the United States and internationally. SRCL has a PE ratio of 37. Currently there are 6 analysts that rate Stericycle a buy, 1 analyst rates it a sell, and 6 rate it a hold.

The average volume for Stericycle has been 1.2 million shares per day over the past 30 days. Stericycle has a market cap of $9.1 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 0.15 and a short float of 6.2% with 6.45 days to cover. Shares are down 11.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

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

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 6.2%. Since the same quarter one year prior, revenues rose by 31.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • 44.85% is the gross profit margin for STERICYCLE INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 8.78% is above that of the industry average.
  • Even though the current debt-to-equity ratio is 1.12, it is still below the industry average, suggesting that this level of debt is acceptable within the Commercial Services & Supplies industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.21 is sturdy.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, SRCL has underperformed the S&P 500 Index, declining 20.35% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
  • 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. When compared to other companies in the Commercial Services & Supplies industry and the overall market, STERICYCLE INC's return on equity is below that of both the industry average and the S&P 500.

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