L Brands (LB) Is Today's Strong On High Volume Stock

Trade-Ideas LLC identified L Brands (LB) as a strong on high relative volume candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

L Brands

(

LB

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

  • LB has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $105.2 million.
  • LB has traded 552,135 shares today.
  • LB is trading at 3.57 times the normal volume for the stock at this time of day.
  • LB is trading at a new high 3.00% 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 LB:

L Brands, Inc. operates as a specialty retailer of women's intimate and other apparel, beauty and personal care products, and accessories. The company operates in three segments: Victoria's Secret, Bath & Body Works, and Victoria's Secret and Bath & Body Works International. The stock currently has a dividend yield of 3.4%. LB has a PE ratio of 18. Currently there are 8 analysts that rate L Brands a buy, 2 analysts rate it a sell, and 14 rate it a hold.

The average volume for L Brands has been 3.2 million shares per day over the past 30 days. L has a market cap of $20.3 billion and is part of the services sector and retail industry. The stock has a beta of 0.80 and a short float of 5.1% with 8.10 days to cover. Shares are down 25.2% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates L Brands as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 6.6%. Since the same quarter one year prior, revenues slightly increased by 4.1%. 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.
  • Net operating cash flow has increased to -$114.00 million or 26.92% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -1.78%.
  • 44.95% is the gross profit margin for L BRANDS INC which we consider to be strong. Regardless of LB's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 5.81% trails the industry average.
  • The share price of L BRANDS INC has not done very well: it is down 15.48% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • 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 Specialty Retail industry. The net income has significantly decreased by 39.2% when compared to the same quarter one year ago, falling from $250.00 million to $152.00 million.

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