LPL Financial Holdings (LPLA) Flagged As Strong On High Volume

Trade-Ideas LLC identified LPL Financial Holdings (LPLA) as a strong on high relative volume candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

LPL Financial Holdings

(

LPLA

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

  • LPLA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.5 million.
  • LPLA has traded 53,713 shares today.
  • LPLA is trading at 2.41 times the normal volume for the stock at this time of day.
  • LPLA is trading at a new high 4.09% 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 LPLA:

LPL Financial Holdings Inc., together with its subsidiaries, provides an integrated platform of brokerage and investment advisory services to independent financial advisors in the United States. The stock currently has a dividend yield of 4.7%. LPLA has a PE ratio of 12. Currently there is 1 analyst that rates LPL Financial Holdings a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for LPL Financial Holdings has been 1.0 million shares per day over the past 30 days. LPL Financial has a market cap of $2.0 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.72 and a short float of 18.2% with 11.80 days to cover. Shares are down 49.6% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates LPL Financial Holdings as a

hold

. The company's strengths can be seen in multiple areas, such as its notable return on equity and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including poor profit margins, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Capital Markets industry and the overall market, LPL FINANCIAL HOLDINGS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • LPL FINANCIAL HOLDINGS INC has improved earnings per share by 7.7% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. However, the consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal year, LPL FINANCIAL HOLDINGS INC's EPS of $1.75 remained unchanged from the prior years' EPS of $1.75. This year, the market expects an improvement in earnings ($1.80 versus $1.75).
  • Despite the weak revenue results, LPLA has outperformed against the industry average of 23.7%. Since the same quarter one year prior, revenues slightly dropped by 9.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Net operating cash flow has decreased to $118.97 million or 18.31% when compared to the same quarter last year. Despite a decrease in cash flow of 18.31%, LPL FINANCIAL HOLDINGS INC is still significantly exceeding the industry average of -199.13%.
  • The gross profit margin for LPL FINANCIAL HOLDINGS INC is currently extremely low, coming in at 13.63%. Regardless of LPLA's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, LPLA's net profit margin of 5.01% is significantly lower than the industry average.

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