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

Iconix Brand Group

(

ICON

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

  • ICON has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.3 million.
  • ICON has traded 269,850 shares today.
  • ICON is trading at 7.72 times the normal volume for the stock at this time of day.
  • ICON is trading at a new low 5.00% 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 ICON:

Iconix Brand Group, Inc., a brand management company, owns, licenses, and markets a portfolio of consumer brands across women's, men's, entertainment, and home primarily in the United States and internationally. ICON has a PE ratio of 13.4. Currently there are 4 analysts that rate Iconix Brand Group a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Iconix Brand Group has been 930,800 shares per day over the past 30 days. Iconix Brand Group has a market cap of $1.7 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.35 and a short float of 37.4% with 21.22 days to cover. Shares are up 7.7% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Iconix Brand Group as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • ICON's revenue growth has slightly outpaced the industry average of 13.8%. Since the same quarter one year prior, revenues rose by 17.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • ICONIX BRAND GROUP INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ICONIX BRAND GROUP INC increased its bottom line by earning $2.65 versus $2.11 in the prior year. This year, the market expects an improvement in earnings ($3.07 versus $2.65).
  • The gross profit margin for ICONIX BRAND GROUP INC is currently very high, coming in at 100.00%. ICON has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, ICON's net profit margin of 21.36% significantly outperformed against the industry.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market on the basis of return on equity, ICONIX BRAND GROUP INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • ICON has underperformed the S&P 500 Index, declining 10.87% from its price level of one year ago. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.

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