Coty (COTY): Today's Weak On High Volume Stock

Trade-Ideas LLC identified Coty (COTY) as a weak on high relative volume candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Coty

(

COTY

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Coty as such a stock due to the following factors:

  • COTY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $45.6 million.
  • COTY has traded 347,762 shares today.
  • COTY is trading at 7.17 times the normal volume for the stock at this time of day.
  • COTY is trading at a new low 8.01% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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 COTY:

Coty Inc., together with its subsidiaries, is engaged in the manufacture, marketing, and distribution of women's and men's fragrances, color cosmetics, and skin and body care related products worldwide. The stock currently has a dividend yield of 0.8%. COTY has a PE ratio of 46. Currently there are 3 analysts that rate Coty a buy, 1 analyst rates it a sell, and 9 rate it a hold.

The average volume for Coty has been 1.6 million shares per day over the past 30 days. Coty has a market cap of $2.9 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 0.73 and a short float of 12.2% with 5.25 days to cover. Shares are up 45% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Coty as a

hold

. 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 and notable return on equity. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and premium valuation.

Highlights from the ratings report include:

  • COTY INC 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 two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, COTY INC turned its bottom line around by earning $0.64 versus -$0.26 in the prior year. This year, the market expects an improvement in earnings ($0.98 versus $0.64).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Personal Products industry. The net income increased by 204.5% when compared to the same quarter one year prior, rising from -$20.10 million to $21.00 million.
  • The gross profit margin for COTY INC is rather high; currently it is at 63.63%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, COTY's net profit margin of 2.05% significantly trails the industry average.
  • The debt-to-equity ratio is very high at 2.72 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, COTY has a quick ratio of 0.67, this demonstrates the lack of ability of the company to cover short-term liquidity needs.

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