Trade-Ideas LLC identified

Legg Mason

(

LM

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

  • LM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $54.5 million.
  • LM has traded 127,483 shares today.
  • LM is trading at 2.21 times the normal volume for the stock at this time of day.
  • LM is trading at a new high 3.06% 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 LM:

Legg Mason, Inc. is a publicly owned asset management holding company. The firm provides investment management and related services to institutional and individual clients, company-sponsored mutual funds and other pooled investment vehicles through its wholly owned subsidiaries. The stock currently has a dividend yield of 2.4%. LM has a PE ratio of 37. Currently there are 7 analysts that rate Legg Mason a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Legg Mason has been 1.8 million shares per day over the past 30 days. Legg Mason has a market cap of $3.5 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.89 and a short float of 4.1% with 2.51 days to cover. Shares are down 18.3% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Legg Mason as a

hold

. The company's strongest point has been its very decent return on equity which we feel should persist. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from the ratings report include:

  • LM, with its decline in revenue, slightly underperformed the industry average of 4.5%. Since the same quarter one year prior, revenues slightly dropped by 8.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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. When compared to other companies in the Capital Markets industry and the overall market, LEGG MASON INC's return on equity is below that of both the industry average and the S&P 500.
  • LEGG MASON INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, LEGG MASON INC reported lower earnings of $2.05 versus $2.33 in the prior year. For the next year, the market is expecting a contraction of 104.6% in earnings (-$0.10 versus $2.05).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Capital Markets industry. The net income has significantly decreased by 279.9% when compared to the same quarter one year ago, falling from $77.04 million to -$138.63 million.

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