Trade-Ideas LLC identified

Ethan Allen Interiors

(

ETH

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

  • ETH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $10.7 million.
  • ETH has traded 71,897 shares today.
  • ETH is trading at 9.35 times the normal volume for the stock at this time of day.
  • ETH is trading at a new high 7.10% 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 ETH:

Ethan Allen Interiors Inc. operates as an interior design company and manufacturer and retailer of home furnishings in North America, Europe, Asia, and the Middle East. The company operates in two segments, Wholesale and Retail. The stock currently has a dividend yield of 2.2%. ETH has a PE ratio of 19. Currently there are 2 analysts that rate Ethan Allen Interiors a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Ethan Allen Interiors has been 156,200 shares per day over the past 30 days. Ethan Allen has a market cap of $744.7 million and is part of the consumer goods sector and consumer durables industry. The stock has a beta of 1.58 and a short float of 21.8% with 10.82 days to cover. Shares are down 5.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Ethan Allen Interiors as a

buy

. The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations, growth in earnings per share, largely solid financial position with reasonable debt levels by most measures and increase in net income. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • The gross profit margin for ETHAN ALLEN INTERIORS INC is rather high; currently it is at 57.49%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 6.90% is above that of the industry average.
  • Net operating cash flow has significantly increased by 135.81% to $16.05 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 123.93%.
  • ETH's debt-to-equity ratio is very low at 0.20 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 0.70 is somewhat weak and could be cause for future problems.
  • ETHAN ALLEN INTERIORS INC has improved earnings per share by 12.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ETHAN ALLEN INTERIORS INC reported lower earnings of $1.28 versus $1.46 in the prior year. This year, the market expects an improvement in earnings ($1.70 versus $1.28).
  • ETH, with its decline in revenue, slightly underperformed the industry average of 8.7%. Since the same quarter one year prior, revenues slightly dropped by 0.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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