Trade-Ideas LLC identified Vulcan Materials ( VMC) 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 Vulcan Materials as such a stock due to the following factors:

  • VMC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $99.8 million.
  • VMC has traded 2.8 million shares today.
  • VMC traded in a range 299.2% of the normal price range with a price range of $5.56.
  • VMC traded below its daily resistance level (quality: 33 days, meaning that the stock is crossing a resistance level set by the last 33 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 VMC:

Vulcan Materials Company produces and sells construction aggregates, asphalt mix, and ready-mixed concrete primarily in the United States. It operates through four segments: Aggregates, Asphalt Mix, Concrete, and Calcium. The stock currently has a dividend yield of 0.6%. VMC has a PE ratio of 58. Currently there are 6 analysts that rate Vulcan Materials a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Vulcan Materials has been 915,400 shares per day over the past 30 days. Vulcan has a market cap of $16.9 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 0.84 and a short float of 1.5% with 1.93 days to cover. Shares are up 30.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Vulcan Materials as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, robust revenue growth, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:
  • VULCAN MATERIALS CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, VULCAN MATERIALS CO increased its bottom line by earning $1.71 versus $1.56 in the prior year. This year, the market expects an improvement in earnings ($3.45 versus $1.71).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Construction Materials industry. The net income increased by 147.7% when compared to the same quarter one year prior, rising from -$39.68 million to $18.92 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 29.2%. Since the same quarter one year prior, revenues rose by 19.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has significantly increased by 123.74% to $42.86 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 102.07%.
  • Powered by its strong earnings growth of 153.57% and other important driving factors, this stock has surged by 42.38% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.

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