Trade-Ideas LLC identified

Sequential Brands Group

(

SQBG

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

  • SQBG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.8 million.
  • SQBG has traded 62,513 shares today.
  • SQBG is trading at 5.19 times the normal volume for the stock at this time of day.
  • SQBG 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 SQBG:

Sequential Brands Group, Inc. owns, promotes, markets, and licenses a portfolio of consumer brands in the fashion, active, and lifestyle categories in the United States and internationally. Currently there are 5 analysts that rate Sequential Brands Group a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Sequential Brands Group has been 186,700 shares per day over the past 30 days. Sequential Brands Group has a market cap of $358.0 million and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 0.66 and a short float of 9.1% with 5.23 days to cover. Shares are down 31.5% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Sequential Brands Group as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, a generally disappointing performance in the stock itself and generally higher debt management risk.

Highlights from the ratings report include:

  • SQBG's very impressive revenue growth greatly exceeded the industry average of 15.3%. Since the same quarter one year prior, revenues leaped by 129.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 239.60% to $6.77 million when compared to the same quarter last year. In addition, SEQUENTIAL BRANDS GROUP INC has also vastly surpassed the industry average cash flow growth rate of -3.63%.
  • SEQUENTIAL BRANDS GROUP INC's earnings per share declined by 25.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SEQUENTIAL BRANDS GROUP INC continued to lose money by earning -$0.01 versus -$2.19 in the prior year. This year, the market expects an improvement in earnings ($0.37 versus -$0.01).
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, SQBG has underperformed the S&P 500 Index, declining 23.03% from its price level of one year ago. 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.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market, SEQUENTIAL BRANDS GROUP INC's return on equity significantly trails that of both the industry average and the S&P 500.

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