Newpark Resources (NR) Is Today's Strong On High Volume Stock

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

  • NR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.7 million.
  • NR has traded 135,214 shares today.
  • NR is trading at 6.30 times the normal volume for the stock at this time of day.
  • NR is trading at a new high 9.08% 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 NR:

Newpark Resources, Inc. provides various products and services primarily to the oil and gas exploration industry. The company operates in two segments, Fluids Systems, and Mats and Integrated Services. Currently there are 3 analysts that rate Newpark Resources a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Newpark Resources has been 740,600 shares per day over the past 30 days. Newpark has a market cap of $494.6 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.38 and a short float of 5.3% with 6.84 days to cover. Shares are up 8.5% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

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

Highlights from the ratings report include:
  • 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 1439.4% when compared to the same quarter one year ago, falling from $0.99 million to -$13.30 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, NEWPARK RESOURCES's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for NEWPARK RESOURCES is currently extremely low, coming in at 13.31%. It has decreased from the same quarter the previous year.
  • Net operating cash flow has significantly decreased to -$2.90 million or 109.17% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 25.84%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1700.00% 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.

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