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 strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Aeropostale as such a stock due to the following factors:
- ARO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.3 million.
- ARO has traded 282,299 shares today.
- ARO is trading at 3.25 times the normal volume for the stock at this time of day.
- ARO is trading at a new high 4.04% 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 ARO:
Aeropostale, Inc., together with its subsidiaries, operates as a mall-based specialty retailer of casual apparel and accessories. Currently there are no analysts that rate Aeropostale a buy, 2 analysts rate it a sell, and 16 rate it a hold.
The average volume for Aeropostale has been 2.4 million shares per day over the past 30 days. Aeropostale has a market cap of $252.3 million and is part of the services sector and retail industry. The stock has a beta of 3.09 and a short float of 35.4% with 9.78 days to cover. Shares are down 64.6% year-to-date as of the close of trading on Friday.
rates Aeropostale as a
. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, generally high debt management risk and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- 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 Specialty Retail industry. The net income has significantly decreased by 89.2% when compared to the same quarter one year ago, falling from -$33.73 million to -$63.82 million.
- 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, AEROPOSTALE INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for AEROPOSTALE INC is rather low; currently it is at 19.18%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -16.10% is significantly below that of the industry average.
- ARO's debt-to-equity ratio of 0.88 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that ARO's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.65 is low and demonstrates weak liquidity.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 68.23%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 88.37% compared to 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.
- You can view the full Aeropostale Ratings Report.