Trade-Ideas LLC identified

LendingClub

(

LC

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

  • LC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $36.0 million.
  • LC has traded 595,741 shares today.
  • LC is trading at 4.59 times the normal volume for the stock at this time of day.
  • LC is trading at a new low 4.00% 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 LC:

LendingClub Corporation operates as an online marketplace for connecting borrowers and investors in the United States. Currently there are 8 analysts that rate LendingClub a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for LendingClub has been 5.9 million shares per day over the past 30 days. LendingClub has a market cap of $2.9 billion and is part of the financial sector and financial services industry. Shares are down 36.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates LendingClub as a

sell

. Among the areas we feel are negative, one of the most important has been very high debt management risk by most measures.

Highlights from the ratings report include:

  • The debt-to-equity ratio is very high at 4.03 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • The gross profit margin for LENDINGCLUB CORP is rather high; currently it is at 58.84%. Regardless of LC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LC's net profit margin of 0.36% is significantly lower than the industry average.
  • Compared to other companies in the Consumer Finance industry and the overall market, LENDINGCLUB CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • LC's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 62.17%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter.
  • LENDINGCLUB CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($0.13 versus -$0.08).

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