Trade-Ideas LLC identified

Lear

(

LEA

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

  • LEA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $88.6 million.
  • LEA has traded 99,983 shares today.
  • LEA is trading at 2.78 times the normal volume for the stock at this time of day.
  • LEA is trading at a new low 3.02% 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 LEA:

Lear Corporation designs, develops, engineers, manufactures, assembles, and supplies automotive seating, electrical distribution systems, and related components primarily to automotive original equipment manufacturers worldwide. It operates through two segments, Seating and Electrical. The stock currently has a dividend yield of 0.9%. LEA has a PE ratio of 11. Currently there are 9 analysts that rate Lear a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Lear has been 1.1 million shares per day over the past 30 days. Lear has a market cap of $8.1 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 1.07 and a short float of 2.9% with 2.54 days to cover. Shares are up 6.9% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Lear as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, attractive valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • LEA's revenue growth has slightly outpaced the industry average of 5.3%. Since the same quarter one year prior, revenues slightly increased by 1.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • LEAR CORP has improved earnings per share by 28.7% 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. During the past fiscal year, LEAR CORP increased its bottom line by earning $8.24 versus $4.99 in the prior year. This year, the market expects an improvement in earnings ($10.10 versus $8.24).
  • Net operating cash flow has significantly increased by 107.06% to $474.60 million when compared to the same quarter last year. In addition, LEAR CORP has also vastly surpassed the industry average cash flow growth rate of -1.15%.

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