Trade-Ideas LLC identified

Guess

(

GES

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

  • GES has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $17.6 million.
  • GES has traded 511,935 shares today.
  • GES is trading at 19.55 times the normal volume for the stock at this time of day.
  • GES is trading at a new low 7.05% 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 GES:

Guess , Inc. designs, markets, distributes, and licenses lifestyle collections of contemporary apparel and accessories for men, women, and children that reflect the American lifestyle and European fashion sensibilities. The stock currently has a dividend yield of 5.5%. GES has a PE ratio of 17. Currently there are 3 analysts that rate Guess a buy, 1 analyst rates it a sell, and 7 rate it a hold.

The average volume for Guess has been 1.1 million shares per day over the past 30 days. Guess has a market cap of $1.4 billion and is part of the services sector and retail industry. The stock has a beta of 0.33 and a short float of 18.1% with 6.59 days to cover. Shares are down 12.9% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Guess as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:

  • GES's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, GES has a quick ratio of 2.04, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 36.62% is the gross profit margin for GUESS INC which we consider to be strong. Regardless of GES's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 7.54% trails the industry average.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Specialty Retail industry and the overall market, GUESS INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Net operating cash flow has decreased to $114.70 million or 27.72% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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