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

Gordman's Stores

(

GMAN

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Gordman's Stores as such a stock due to the following factors:

  • GMAN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.2 million.
  • GMAN has traded 52,756 shares today.
  • GMAN is trading at 2.91 times the normal volume for the stock at this time of day.
  • GMAN is trading at a new low 3.09% 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 GMAN:

TheStreet Recommends

Gordmans Stores, Inc. operates department stores under the Gordmans name in the United States. Its merchandise selection includes a range of apparel, footwear, and home fashions products, as well as accessories. Currently there is 1 analyst that rates Gordman's Stores a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Gordman's Stores has been 203,200 shares per day over the past 30 days. Gordman's Stores has a market cap of $161.7 million and is part of the services sector and retail industry. The stock has a beta of -1.36 and a short float of 9.7% with 2.29 days to cover. Shares are up 202.6% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Gordman's Stores as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity, weak operating cash flow and feeble growth in its earnings per share.

Highlights from the ratings report include:

  • The debt-to-equity ratio of 1.07 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.20, which clearly demonstrates the inability to cover short-term cash needs.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Multiline Retail industry and the overall market, GORDMANS STORES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $10.18 million or 36.98% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • GORDMANS STORES INC's earnings per share declined by 14.3% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, GORDMANS STORES INC swung to a loss, reporting -$0.18 versus $0.42 in the prior year. This year, the market expects an improvement in earnings (-$0.05 versus -$0.18).
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Multiline Retail industry average, but is less than that of the S&P 500. The net income has decreased by 15.9% when compared to the same quarter one year ago, dropping from $2.73 million to $2.30 million.

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