Restoration Hardware Holdings (RH): Today's Weak On High Volume Stock

Trade-Ideas LLC identified Restoration Hardware Holdings (RH) as a weak on high relative volume candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Restoration Hardware Holdings

(

RH

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

  • RH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $53.9 million.
  • RH has traded 133,375 shares today.
  • RH is trading at 8.70 times the normal volume for the stock at this time of day.
  • RH is trading at a new low 5.02% 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 RH:

Restoration Hardware Holdings, Inc., together with its subsidiaries, engages in the retail of home furnishings. Its product categories include furniture, lighting, textiles, bathware, decor, outdoor and garden, tableware, and children's furnishings. RH has a PE ratio of 42. Currently there are 11 analysts that rate Restoration Hardware Holdings a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Restoration Hardware Holdings has been 807,400 shares per day over the past 30 days. Restoration Hardware has a market cap of $4.0 billion and is part of the services sector and retail industry. The stock has a beta of 0.82 and a short float of 32.3% with 17.86 days to cover. Shares are up 3.2% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Restoration Hardware Holdings as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, increase in net income, good cash flow from operations and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:

  • RH's revenue growth has slightly outpaced the industry average of 9.1%. Since the same quarter one year prior, revenues rose by 16.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • RESTORATION HARDWARE HLDNGS has improved earnings per share by 7.6% 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. During the past fiscal year, RESTORATION HARDWARE HLDNGS increased its bottom line by earning $2.19 versus $0.42 in the prior year. This year, the market expects an improvement in earnings ($3.13 versus $2.19).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Specialty Retail industry average. The net income increased by 9.8% when compared to the same quarter one year prior, going from $27.25 million to $29.94 million.
  • Net operating cash flow has slightly increased to $28.00 million or 1.83% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -10.88%.
  • 41.43% is the gross profit margin for RESTORATION HARDWARE HLDNGS which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 5.90% trails the industry average.

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