Trade-Ideas: Rent-A-Center (RCII) Is Today's Strong On High Relative Volume Stock
Trade-Ideas LLC identified
(
) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Rent-A-Center as such a stock due to the following factors:
- RCII has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $11.7 million.
- RCII has traded 65,919 shares today.
- RCII is trading at 2.02 times the normal volume for the stock at this time of day.
- RCII is trading at a new high 3.05% 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 RCII:
Rent-A-Center, Inc., together with its subsidiaries, leases household durable goods to customers on a rent-to-own basis. The company operates through four segments: Core U.S., Acceptance Now, Mexico, and Franchising. The stock currently has a dividend yield of 2.6%. Currently there is 1 analyst that rates Rent-A-Center a buy, no analysts rate it a sell, and 4 rate it a hold.
The average volume for Rent-A-Center has been 946,900 shares per day over the past 30 days. Rent-A-Center has a market cap of $645.6 million and is part of the services sector and diversified services industry. The stock has a beta of 0.57 and a short float of 16.1% with 9.00 days to cover. Shares are down 18% year-to-date as of the close of trading on Thursday.
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Analysis:
rates Rent-A-Center as a
. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and deteriorating net income.
Highlights from the ratings report include:
- Currently the debt-to-equity ratio of 1.50 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Specialty Retail industry and the overall market, RENT-A-CENTER INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has declined marginally to $226.51 million or 0.66% when compared to the same quarter last year. Despite a decrease in cash flow of 0.66%, RENT-A-CENTER INC is in line with the industry average cash flow growth rate of -1.85%.
- Looking at the price performance of RCII's shares over the past 12 months, there is not much good news to report: the stock is down 61.11%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Specialty Retail industry average. The net income has decreased by 8.2% when compared to the same quarter one year ago, dropping from $27.30 million to $25.06 million.
- You can view the full Rent-A-Center Ratings Report.
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