Trade-Ideas: Dollar Tree Stores (DLTR) Is Today's Weak On High Relative Volume Stock
Trade-Ideas LLC identified
(
) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Dollar Tree Stores as such a stock due to the following factors:
- DLTR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $163.9 million.
- DLTR has traded 733,909 shares today.
- DLTR is trading at 5.53 times the normal volume for the stock at this time of day.
- DLTR is trading at a new low 4.01% 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.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in DLTR with the Ticky from Trade-Ideas. See the FREE profile for DLTR NOW at Trade-Ideas
More details on DLTR:
Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise at the fixed price of $1.00. DLTR has a PE ratio of 44. Currently there are 12 analysts that rate Dollar Tree Stores a buy, 1 analyst rates it a sell, and 7 rate it a hold.
The average volume for Dollar Tree Stores has been 3.8 million shares per day over the past 30 days. Dollar Tree Stores has a market cap of $15.6 billion and is part of the services sector and retail industry. The stock has a beta of 0.64 and a short float of 6% with 4.62 days to cover. Shares are down 5.4% year-to-date as of the close of trading on Thursday.
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.
Analysis:
rates Dollar Tree Stores as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 7.4%. Since the same quarter one year prior, revenues rose by 48.2%. 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.
- 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. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
- DOLLAR TREE INC 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, DOLLAR TREE INC increased its bottom line by earning $2.90 versus $2.75 in the prior year. For the next year, the market is expecting a contraction of 3.1% in earnings ($2.81 versus $2.90).
- The gross profit margin for DOLLAR TREE INC is currently lower than what is desirable, coming in at 31.37%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -3.25% trails that of the industry average.
- Net operating cash flow has significantly decreased to -$175.50 million or 205.02% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full Dollar Tree Stores Ratings Report.
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.