Trade-Ideas LLC identified

AEP Industries

(

AEPI

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

  • AEPI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.3 million.
  • AEPI has traded 130,489 shares today.
  • AEPI is trading at 7.86 times the normal volume for the stock at this time of day.
  • AEPI is trading at a new low 3.05% 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 AEPI:

AEP Industries Inc. manufactures and markets flexible plastic packaging films in North America. The company offers a range of polyethylene and polyvinyl chloride flexible packaging products for consumer, industrial, and agricultural applications. The stock currently has a dividend yield of 0.6%. AEPI has a PE ratio of 11.

The average volume for AEP Industries has been 29,100 shares per day over the past 30 days. AEP has a market cap of $428.3 million and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 0.22 and a short float of 3% with 1.38 days to cover. Shares are up 6.3% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates AEP Industries as a

hold

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 54.64% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • AEP INDUSTRIES INC has improved earnings per share by 22.9% 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. During the past fiscal year, AEP INDUSTRIES INC turned its bottom line around by earning $5.63 versus -$0.98 in the prior year.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to other companies in the Containers & Packaging industry and the overall market on the basis of return on equity, AEP INDUSTRIES INC has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
  • Despite the current debt-to-equity ratio of 1.94, it is still below the industry average, suggesting that this level of debt is acceptable within the Containers & Packaging industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.20 is sturdy.
  • The gross profit margin for AEP INDUSTRIES INC is rather low; currently it is at 22.72%. Regardless of AEPI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, AEPI's net profit margin of 5.04% compares favorably to the industry average.

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