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Trade-Ideas LLC identified

Genesco

(

GCO

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

  • GCO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.4 million.
  • GCO has traded 72,350 shares today.
  • GCO is trading at 5.72 times the normal volume for the stock at this time of day.
  • GCO is trading at a new high 4.10% 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 GCO:

TheStreet Recommends

Genesco Inc. engages in the retail and wholesale of footwear, apparel, and accessories. The company operates in five segments: Journeys Group, Schuh Group, Lids Sports Group, Johnston & Murphy Group, and Licensed Brands. GCO has a PE ratio of 15. Currently there are 2 analysts that rate Genesco a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Genesco has been 194,300 shares per day over the past 30 days. Genesco has a market cap of $1.4 billion and is part of the services sector and retail industry. The stock has a beta of 1.65 and a short float of 6.3% with 3.91 days to cover. Shares are down 21.8% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Genesco as a

hold

. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income and revenue growth. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • GENESCO INC 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, GENESCO INC increased its bottom line by earning $4.19 versus $3.94 in the prior year. This year, the market expects an improvement in earnings ($4.76 versus $4.19).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Specialty Retail industry. The net income increased by 60.2% when compared to the same quarter one year prior, rising from $4.69 million to $7.52 million.
  • GCO's debt-to-equity ratio is very low at 0.11 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.25 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • GCO has underperformed the S&P 500 Index, declining 16.79% from its price level of one year ago. 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.
  • Net operating cash flow has significantly decreased to -$94.68 million or 289.58% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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