Texas Roadhouse (TXRH) Flagged As Strong On High Volume

Trade-Ideas LLC identified Texas Roadhouse (TXRH) as a strong on high relative volume candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Texas Roadhouse

(

TXRH

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

  • TXRH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $36.7 million.
  • TXRH has traded 266,980 shares today.
  • TXRH is trading at 14.78 times the normal volume for the stock at this time of day.
  • TXRH is trading at a new high 6.03% 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 TXRH:

Texas Roadhouse, Inc., together with its subsidiaries, operates as a full-service restaurant company. The company operates its restaurants primarily under the Texas Roadhouse name. The stock currently has a dividend yield of 2%. TXRH has a PE ratio of 27. Currently there are 6 analysts that rate Texas Roadhouse a buy, no analysts rate it a sell, and 12 rate it a hold.

The average volume for Texas Roadhouse has been 673,800 shares per day over the past 30 days. Texas Roadhouse has a market cap of $2.4 billion and is part of the services sector and leisure industry. The stock has a beta of 1.11 and a short float of 9.7% with 5.44 days to cover. Shares are up 3.7% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Texas Roadhouse as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 1.2%. Since the same quarter one year prior, revenues rose by 15.0%. 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 slightly increased to $37.13 million or 3.92% when compared to the same quarter last year. In addition, TEXAS ROADHOUSE INC has also vastly surpassed the industry average cash flow growth rate of -59.23%.
  • TXRH's debt-to-equity ratio is very low at 0.08 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.45 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

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