FXCM (FXCM) Is Strong On High Volume Today
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
(
) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified FXCM as such a stock due to the following factors:
- FXCM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.5 million.
- FXCM has traded 5.1 million shares today.
- FXCM is trading at 12.67 times the normal volume for the stock at this time of day.
- FXCM is trading at a new high 18.14% 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 FXCM:
FXCM Inc., through its subsidiaries, provides online foreign exchange (FX) trading and related services to retail and institutional customers worldwide. It operates in two segments, Retail Trading and Institutional Trading. The stock currently has a dividend yield of 11.3%. FXCM has a PE ratio of 21.2. Currently there are no analysts that rate FXCM a buy, 2 analysts rate it a sell, and 3 rate it a hold.
The average volume for FXCM has been 10.7 million shares per day over the past 30 days. FXCM has a market cap of $100.0 million and is part of the financial sector and financial services industry. The stock has a beta of 2.05 and a short float of 32.3% with 5.88 days to cover. Shares are down 87% year-to-date as of the close of trading on Thursday.
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Analysis:
rates FXCM as a
. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, disappointing return on equity, poor profit margins and weak operating cash flow.
Highlights from the ratings report include:
- FXCM's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 87.16%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, FXCM is still more expensive than most of the other companies in its industry.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Capital Markets industry and the overall market, FXCM INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for FXCM INC is rather low; currently it is at 22.33%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.06% significantly trails the industry average.
- Net operating cash flow has significantly decreased to -$8.64 million or 118.88% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- FXCM 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 year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, FXCM INC increased its bottom line by earning $0.48 versus $0.38 in the prior year. For the next year, the market is expecting a contraction of 35.4% in earnings ($0.31 versus $0.48).
- You can view the full FXCM Ratings Report.
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