Today's Weak On High Volume Stock: Vera Bradley (VRA)
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 or Stephanie Link.
Trade-Ideas LLC identified
(
) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Vera Bradley as such a stock due to the following factors:
- VRA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.0 million.
- VRA has traded 1.8 million shares today.
- VRA is trading at 222.63 times the normal volume for the stock at this time of day.
- VRA is trading at a new low 13.00% 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 VRA:
Vera Bradley, Inc., through its subsidiaries, designs, produces, markets, and retails functional accessories for women. VRA has a PE ratio of 17.4. Currently there are 4 analysts that rate Vera Bradley a buy, 1 analyst rates it a sell, and 5 rate it a hold.
The average volume for Vera Bradley has been 352,800 shares per day over the past 30 days. Vera Bradley has a market cap of $730.0 million and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.35 and a short float of 72.7% with 21.53 days to cover. Shares are down 11.3% year-to-date as of the close of trading on Tuesday.
Analysis:
rates Vera Bradley as a
. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.
Highlights from the ratings report include:
- VRA has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, VRA has a quick ratio of 2.09, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for VERA BRADLEY INC is rather high; currently it is at 55.57%. Regardless of VRA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 5.54% trails the industry average.
- VERA BRADLEY INC's earnings per share declined by 46.1% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, VERA BRADLEY INC reported lower earnings of $1.47 versus $1.70 in the prior year. For the next year, the market is expecting a contraction of 30.6% in earnings ($1.02 versus $1.47).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry. The net income has significantly decreased by 54.4% when compared to the same quarter one year ago, falling from $15.23 million to $6.94 million.
- You can view the full Vera Bradley Ratings Report.
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