Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified

RCS Capital

(

RCAP

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

  • RCAP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $21.1 million.
  • RCAP has traded 168,682 shares today.
  • RCAP is trading at 2.55 times the normal volume for the stock at this time of day.
  • RCAP is trading at a new high 7.08% 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 RCAP:

RCS Capital Corporation, through its subsidiaries, is engaged in the wholesale broker-dealer, and investment banking and capital markets business activities. The stock currently has a dividend yield of 3%. Currently there is 1 analyst that rates RCS Capital a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for RCS Capital has been 1.6 million shares per day over the past 30 days. RCS has a market cap of $746.4 million and is part of the financial sector and financial services industry. Shares are down 39.2% year-to-date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates RCS Capital as a

sell

. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • 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 5872.6% when compared to the same quarter one year ago, falling from $0.56 million to -$32.27 million.
  • The gross profit margin for RCS CAPITAL CORP is currently extremely low, coming in at 2.16%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -4.75% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$28.97 million or 396.85% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 36.92%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 3050.00% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • RCS CAPITAL CORP 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. This year, the market expects an improvement in earnings ($1.66 versus $0.10).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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