Trade-Ideas LLC identified

LendingTree

(

TREE

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

  • TREE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $45.7 million.
  • TREE has traded 89,526 shares today.
  • TREE is trading at 4.59 times the normal volume for the stock at this time of day.
  • TREE 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 TREE:

LendingTree, Inc., through its subsidiaries, operates an online loan marketplace for consumers seeking loans and other credit-based offerings in the United States. TREE has a PE ratio of 18. Currently there are 6 analysts that rate LendingTree a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for LendingTree has been 686,000 shares per day over the past 30 days. LendingTree has a market cap of $886.4 million and is part of the financial sector and real estate industry. The stock has a beta of 1.35 and a short float of 60.9% with 6.29 days to cover. Shares are down 9.3% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates LendingTree as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity and solid stock price performance. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good.

Highlights from the ratings report include:

  • TREE's very impressive revenue growth greatly exceeded the industry average of 10.4%. Since the same quarter one year prior, revenues leaped by 85.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market, LENDINGTREE INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for LENDINGTREE INC is currently very high, coming in at 96.33%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, TREE's net profit margin of 6.02% significantly trails the industry average.
  • Net operating cash flow has increased to $7.77 million or 49.34% when compared to the same quarter last year. Despite an increase in cash flow of 49.34%, LENDINGTREE INC is still growing at a significantly lower rate than the industry average of 137.21%.
  • LENDINGTREE INC has improved earnings per share by 22.7% 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 two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, LENDINGTREE INC turned its bottom line around by earning $4.02 versus -$0.06 in the prior year. For the next year, the market is expecting a contraction of 22.9% in earnings ($3.10 versus $4.02).

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