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 weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Credit Acceptance as such a stock due to the following factors:
- CACC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.2 million.
- CACC has traded 52,436 shares today.
- CACC is trading at 4.29 times the normal volume for the stock at this time of day.
- CACC is trading at a new low 5.04% 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 CACC:
Credit Acceptance Corporation provides automobile dealers financing programs, and related products and services that enable them to sell vehicles to consumers. CACC has a PE ratio of 14.0. Currently there are no analysts that rate Credit Acceptance a buy, 1 analyst rates it a sell, and 4 rate it a hold.
The average volume for Credit Acceptance has been 49,400 shares per day over the past 30 days. Credit Acceptance has a market cap of $3.2 billion and is part of the financial sector and financial services industry. The stock has a beta of 0.93 and a short float of 9.6% with 13.16 days to cover. Shares are up 19.9% year-to-date as of the close of trading on Wednesday.
rates Credit Acceptance as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, increase in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the ratings report include:
- CACC's revenue growth has slightly outpaced the industry average of 4.5%. Since the same quarter one year prior, revenues slightly increased by 5.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 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 28.31% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CACC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- CREDIT ACCEPTANCE CORP 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. We feel that this trend should continue. During the past fiscal year, CREDIT ACCEPTANCE CORP increased its bottom line by earning $10.59 versus $8.62 in the prior year. This year, the market expects an improvement in earnings ($12.36 versus $10.59).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Consumer Finance industry average. The net income increased by 13.7% when compared to the same quarter one year prior, going from $65.10 million to $74.00 million.
- The gross profit margin for CREDIT ACCEPTANCE CORP is currently very high, coming in at 71.71%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 40.72% significantly outperformed against the industry average.
- You can view the full Credit Acceptance Ratings Report.