Today's Weak On High Volume Stock: BJ's Restaurants (BJRI)
Trade-Ideas LLC identified
(
) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified BJ's Restaurants as such a stock due to the following factors:
- BJRI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.6 million.
- BJRI has traded 53,987 shares today.
- BJRI is trading at 10.87 times the normal volume for the stock at this time of day.
- BJRI is trading at a new low 7.00% 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 BJRI:
BJ's Restaurants, Inc. owns and operates casual dining restaurants in the United States. The company's restaurants offer pizzas, craft and other beers, appetizers, entrees, pastas, sandwiches, salads, and desserts. BJRI has a PE ratio of 24. Currently there are 3 analysts that rate BJ's Restaurants a buy, 1 analyst rates it a sell, and 8 rate it a hold.
The average volume for BJ's Restaurants has been 232,600 shares per day over the past 30 days. BJ's has a market cap of $1.1 billion and is part of the services sector and leisure industry. The stock has a beta of 1.05 and a short float of 6.1% with 6.96 days to cover. Shares are up 3.1% year-to-date as of the close of trading on Monday.
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Analysis:
rates BJ's Restaurants as a
. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, revenue growth, reasonable valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- BJ'S RESTAURANTS INC has improved earnings per share by 30.6% 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, BJ'S RESTAURANTS INC increased its bottom line by earning $1.74 versus $0.98 in the prior year. This year, the market expects an improvement in earnings ($2.02 versus $1.74).
- Despite its growing revenue, the company underperformed as compared with the industry average of 10.3%. Since the same quarter one year prior, revenues slightly increased by 8.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Net operating cash flow has significantly increased by 51.86% to $46.82 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 5.09%.
- The current debt-to-equity ratio, 0.31, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.33 is very weak and demonstrates a lack of ability to pay short-term obligations.
- You can view the full BJ's Restaurants Ratings Report.
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