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.

Trade-Ideas LLC identified

Capstead Mortgage

(

CMO

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

  • CMO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.8 million.
  • CMO has traded 529,717 shares today.
  • CMO is trading at 9.22 times the normal volume for the stock at this time of day.
  • CMO is trading at a new low 3.02% 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 CMO with the Ticky from Trade-Ideas. See the FREE profile for CMO NOW at Trade-Ideas

More details on CMO:

Capstead Mortgage Corporation operates as a real estate investment trust (REIT) in the United States. The stock currently has a dividend yield of 10.9%. CMO has a PE ratio of 9. Currently there are 2 analysts that rate Capstead Mortgage a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Capstead Mortgage has been 874,500 shares per day over the past 30 days. Capstead has a market cap of $1.1 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.54 and a short float of 7.8% with 7.44 days to cover. Shares are down 7% year-to-date as of the close of trading on Wednesday.

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.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Capstead Mortgage as a

hold

. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • The gross profit margin for CAPSTEAD MORTGAGE CORP is currently very high, coming in at 94.05%. Regardless of CMO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CMO's net profit margin of 57.75% significantly outperformed against the industry.
  • CMO, with its decline in revenue, slightly underperformed the industry average of 8.9%. Since the same quarter one year prior, revenues slightly dropped by 1.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Net operating cash flow has declined marginally to $58.85 million or 4.15% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, CAPSTEAD MORTGAGE CORP has marginally lower results.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Real Estate Investment Trusts (REITs) industry average, but is greater than that of the S&P 500. The net income has decreased by 11.5% when compared to the same quarter one year ago, dropping from $38.39 million to $33.96 million.

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.