Trade-Ideas LLC identified

Aflac

(

AFL

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

  • AFL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $146.3 million.
  • AFL has traded 706,790 shares today.
  • AFL is trading at 7.13 times the normal volume for the stock at this time of day.
  • AFL is trading at a new low 3.00% 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 AFL:

TST Recommends

Aflac Incorporated, through its subsidiary, American Family Life Assurance Company of Columbus, provides supplemental health and life insurance products. It operates through two segments, Aflac Japan and Aflac U.S. The stock currently has a dividend yield of 2.9%. AFL has a PE ratio of 1. Currently there are 4 analysts that rate Aflac a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for Aflac has been 2.2 million shares per day over the past 30 days. Aflac has a market cap of $24.5 billion and is part of the financial sector and insurance industry. The stock has a beta of 1.14 and a short float of 1.7% with 2.68 days to cover. Shares are down 2.6% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Aflac as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, poor profit margins and deteriorating net income.

Highlights from the ratings report include:

  • Although AFL's debt-to-equity ratio of 0.29 is very low, it is currently higher than that of the industry average.
  • Net operating cash flow has increased to $1,667.00 million or 15.36% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -13.39%.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 15.7%. Since the same quarter one year prior, revenues fell by 12.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for AFLAC INC is rather low; currently it is at 18.49%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 11.25% is above that of the industry average.
  • AFLAC INC's earnings per share declined by 15.4% 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, AFLAC INC reported lower earnings of $6.51 versus $6.75 in the prior year. For the next year, the market is expecting a contraction of 6.8% in earnings ($6.07 versus $6.51).

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