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Trade-Ideas: Capital One Financial (COF) Is Today's Strong On High Relative Volume Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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

  • COF has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $193.1 million.
  • COF has traded 1.5 million shares today.
  • COF is trading at 4.88 times the normal volume for the stock at this time of day.
  • COF 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in COF with the Ticky from Trade-Ideas. See the FREE profile for COF NOW at Trade-Ideas

More details on COF:

Capital One Financial Corporation operates as the bank holding company for the Capital One Bank (USA), National Association (COBNA); and Capital One, National Association (CONA), which provide various financial products and services in the United States. The stock currently has a dividend yield of 1.8%. COF has a PE ratio of 11.9. Currently there are 18 analysts that rate Capital One Financial a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Capital One Financial has been 3.5 million shares per day over the past 30 days. Capital One Financial has a market cap of $39.1 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.27 and a short float of 1.6% with 3.33 days to cover. Shares are up 15.7% year to date as of the close of trading on Thursday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Capital One Financial as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 4.2%. Since the same quarter one year prior, revenues rose by 22.9%. 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.
  • The debt-to-equity ratio is somewhat low, currently at 0.91, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
  • Net operating cash flow has significantly increased by 90.58% to $2,794.00 million when compared to the same quarter last year. Despite an increase in cash flow, CAPITAL ONE FINANCIAL CORP's cash flow growth rate is still lower than the industry average growth rate of 109.08%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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