Signet Jewelers (SIG): Today's Weak On High Volume Stock - TheStreet

Trade-Ideas LLC identified

Signet Jewelers

(

SIG

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

  • SIG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $139.8 million.
  • SIG has traded 1.3 million shares today.
  • SIG is trading at 21.29 times the normal volume for the stock at this time of day.
  • SIG is trading at a new low 6.00% 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 SIG:

Signet Jewelers Limited engages in the retail sale of jewelry and watches in the United States, the United Kingdom, the Republic of Ireland, and the Channel Islands. The stock currently has a dividend yield of 0.6%. SIG has a PE ratio of 27. Currently there are 10 analysts that rate Signet Jewelers a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Signet Jewelers has been 772,800 shares per day over the past 30 days. Signet Jewelers has a market cap of $11.0 billion and is part of the services sector and specialty retail industry. The stock has a beta of 1.01 and a short float of 2.4% with 1.84 days to cover. Shares are up 6.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Signet Jewelers as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, growth in earnings per share and increase in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 4.2%. Since the same quarter one year prior, revenues rose by 14.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.50, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, SIG has a quick ratio of 1.50, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • SIGNET JEWELERS LTD has improved earnings per share by 8.3% 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 year. We feel that this trend should continue. During the past fiscal year, SIGNET JEWELERS LTD increased its bottom line by earning $4.74 versus $4.57 in the prior year. This year, the market expects an improvement in earnings ($6.88 versus $4.74).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Specialty Retail industry average. The net income increased by 7.2% when compared to the same quarter one year prior, going from $58.00 million to $62.20 million.

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