Trade-Ideas LLC identified

Frontline

(

FRO

) as a weak 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 $4.2 million.
  • FRO has traded 999,306 shares today.
  • FRO is trading at 3.87 times the normal volume for the stock at this time of day.
  • FRO is trading at a new low 3.08% 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 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 1.4 million shares per day over the past 30 days. Frontline has a market cap of $571.3 million and is part of the services sector and transportation industry. The stock has a beta of 1.92 and a short float of 17.6% with 10.70 days to cover. Shares are up 22.7% 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 very high debt management risk by most measures.

Highlights from the ratings report include:

  • The debt-to-equity ratio is very high at 2.63 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, FRONTLINE LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • 44.89% 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 12.88% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 10752.21% to $45.70 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 -25.83%.
  • This stock has increased by 121.53% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in FRO do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

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