Six Flags Entertainment (SIX) Highlighted As Weak On High Volume
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.
Trade-Ideas LLC identified
(
) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Six Flags Entertainment as such a stock due to the following factors:
- SIX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $29.1 million.
- SIX has traded 131,876 shares today.
- SIX is trading at 5.17 times the normal volume for the stock at this time of day.
- SIX is trading at a new low 3.09% 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 SIX:
Six Flags Entertainment Corporation owns and operates regional theme, water, and zoological parks. Its parks offer various thrill rides, water attractions, themed areas, concerts and shows, restaurants, game venues, and retail outlets. The stock currently has a dividend yield of 4.3%. SIX has a PE ratio of 62.9. Currently there are 3 analysts that rate Six Flags Entertainment a buy, no analysts rate it a sell, and 2 rate it a hold.
The average volume for Six Flags Entertainment has been 597,800 shares per day over the past 30 days. Six Flags Entertainment has a market cap of $4.5 billion and is part of the services sector and leisure industry. The stock has a beta of 1.42 and a short float of 6.1% with 7.00 days to cover. Shares are up 10.3% year-to-date as of the close of trading on Friday.
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Analysis:
rates Six Flags Entertainment as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, notable return on equity and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 7.5%. Since the same quarter one year prior, revenues rose by 19.1%. 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.
- 46.33% is the gross profit margin for SIX FLAGS ENTERTAINMENT CORP 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 -18.57% is in-line with the industry average.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to other companies in the Hotels, Restaurants & Leisure industry and the overall market on the basis of return on equity, SIX FLAGS ENTERTAINMENT CORP has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
- SIX FLAGS ENTERTAINMENT CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, SIX FLAGS ENTERTAINMENT CORP reported lower earnings of $0.73 versus $1.20 in the prior year. This year, the market expects an improvement in earnings ($1.63 versus $0.73).
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full Six Flags Entertainment Ratings Report.
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