Trade-Ideas LLC identified

Polaris Industries

(

PII

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

  • PII has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $89.2 million.
  • PII has traded 127,620 shares today.
  • PII is trading at 3.18 times the normal volume for the stock at this time of day.
  • PII is trading at a new low 3.01% 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 PII:

Polaris Industries Inc., together with its subsidiaries, designs, engineers, manufactures, and markets off-road vehicles, snowmobiles, motorcycles, and on-road vehicles in the United States, Canada, Western Europe, Australia, and Mexico. The stock currently has a dividend yield of 2.2%. PII has a PE ratio of 15. Currently there are 11 analysts that rate Polaris Industries a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Polaris Industries has been 1.4 million shares per day over the past 30 days. Polaris has a market cap of $6.4 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 1.16 and a short float of 14.2% with 9.11 days to cover. Shares are up 14.3% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Polaris Industries as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and poor profit margins.

Highlights from the ratings report include:

  • The current debt-to-equity ratio, 0.47, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.43 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • PII, with its decline in revenue, slightly underperformed the industry average of 5.3%. Since the same quarter one year prior, revenues fell by 13.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Leisure Equipment & Products industry and the overall market, POLARIS INDUSTRIES INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$23.77 million or 115.97% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Leisure Equipment & Products industry average. The net income has decreased by 18.3% when compared to the same quarter one year ago, dropping from $135.40 million to $110.68 million.

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