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

Frontline

(

FRO

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

  • FRO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.2 million.
  • FRO has traded 849,402 shares today.
  • FRO is trading at 2.72 times the normal volume for the stock at this time of day.
  • FRO is trading at a new high 4.01% 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 FRO:

Frontline Ltd., a shipping company, through its subsidiaries, owns and operates oil tankers and oil/bulk/ore carriers. The company provides seaborne transportation of crude oil and oil products. Currently there is 1 analyst that rates Frontline a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Frontline has been 2.8 million shares per day over the past 30 days. Frontline has a market cap of $340.0 million and is part of the services sector and transportation industry. The stock has a beta of 2.05 and a short float of 8.8% with 2.54 days to cover. Shares are up 19.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Frontline as a

sell

. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • In its most recent trading session, FRO has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Despite the weak revenue results, FRO has outperformed against the industry average of 38.8%. Since the same quarter one year prior, revenues fell by 15.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • 46.00% is the gross profit margin for FRONTLINE LTD which we consider to be strong. It has increased significantly from the same period last year. Along with this, the net profit margin of 21.55% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 103.15% to $42.97 million when compared to the same quarter last year. In addition, FRONTLINE LTD has also vastly surpassed the industry average cash flow growth rate of -53.44%.
  • FRONTLINE LTD 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, FRONTLINE LTD continued to lose money by earning -$1.66 versus -$2.38 in the prior year. This year, the market expects an improvement in earnings ($0.48 versus -$1.66).

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