Trade-Ideas LLC identified

Penske Automotive Group

(

PAG

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

  • PAG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $22.6 million.
  • PAG has traded 323,079 shares today.
  • PAG is trading at 5.71 times the normal volume for the stock at this time of day.
  • PAG is trading at a new low 6.01% 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 PAG:

TST Recommends

Penske Automotive Group, Inc. operates as an automotive retailer. The company operates through two segments, Retail Automotive and Other. The stock currently has a dividend yield of 3%. PAG has a PE ratio of 9. Currently there are 7 analysts that rate Penske Automotive Group a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Penske Automotive Group has been 491,100 shares per day over the past 30 days. Penske Automotive Group has a market cap of $3.0 billion and is part of the services sector and specialty retail industry. The stock has a beta of 1.22 and a short float of 2.8% with 2.44 days to cover. Shares are down 21.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Penske Automotive Group as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, compelling growth in net income, attractive valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • PAG's revenue growth has slightly outpaced the industry average of 4.4%. Since the same quarter one year prior, revenues rose by 12.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • PENSKE AUTOMOTIVE GROUP INC has improved earnings per share by 12.9% 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. We feel that this trend should continue. During the past fiscal year, PENSKE AUTOMOTIVE GROUP INC increased its bottom line by earning $3.34 versus $2.75 in the prior year. This year, the market expects an improvement in earnings ($3.73 versus $3.34).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Specialty Retail industry average. The net income increased by 16.2% when compared to the same quarter one year prior, going from $74.50 million to $86.60 million.
  • Net operating cash flow has significantly increased by 60.46% to $104.30 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 19.76%.

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