Trade-Ideas LLC identified

Controladora Vuela Compania de Aviacion SAB

(

VLRS

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Controladora Vuela Compania de Aviacion SAB as such a stock due to the following factors:

  • VLRS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.0 million.
  • VLRS has traded 55,840 shares today.
  • VLRS is trading at 4.67 times the normal volume for the stock at this time of day.
  • VLRS is trading at a new low 3.03% 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 VLRS:

Controladora Vuela Compania de Aviacion, S.A.B. de C.V. provides air transportation services for passengers, cargo, and mail in Mexico and internationally. VLRS has a PE ratio of 14. Currently there are no analysts that rate Controladora Vuela Compania de Aviacion SAB a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Controladora Vuela Compania de Aviacion SAB has been 272,400 shares per day over the past 30 days. Controladora Vuela Compania de Aviacion SAB has a market cap of $2.1 billion and is part of the services sector and transportation industry. Shares are up 19.2% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Controladora Vuela Compania de Aviacion SAB as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including premium valuation and poor profit margins.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 5.7%. Since the same quarter one year prior, revenues rose by 21.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CONTROLADORA VUELA COMPANIA reported significant earnings per share improvement 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. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, CONTROLADORA VUELA COMPANIA increased its bottom line by earning $1.41 versus $0.41 in the prior year. This year, the market expects an improvement in earnings ($1.43 versus $1.41).
  • VLRS's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.90 is somewhat weak and could be cause for future problems.
  • The gross profit margin for CONTROLADORA VUELA COMPANIA is currently lower than what is desirable, coming in at 31.25%. Regardless of VLRS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, VLRS's net profit margin of 11.61% compares favorably to the industry average.

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