Trade-Ideas LLC identified

Fifth Street Finance

(

FSC

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

  • FSC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $10.0 million.
  • FSC has traded 118,091 shares today.
  • FSC is trading at 2.75 times the normal volume for the stock at this time of day.
  • FSC is trading at a new high 4.02% 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 FSC:

Fifth Street Finance Corp. The stock currently has a dividend yield of 13.6%. FSC has a PE ratio of 7. Currently there are 6 analysts that rate Fifth Street Finance a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Fifth Street Finance has been 1.3 million shares per day over the past 30 days. Fifth Street Finance has a market cap of $818.9 million and is part of the financial sector and financial services industry. Shares are down 14.6% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Fifth Street Finance as a

hold

. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:

  • The revenue fell significantly faster than the industry average of 0.4%. Since the same quarter one year prior, revenues fell by 33.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for FIFTH STREET FINANCE CORP is rather high; currently it is at 61.91%. Regardless of FSC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, FSC's net profit margin of 0.39% is significantly lower than the industry average.
  • FIFTH STREET FINANCE 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, FIFTH STREET FINANCE CORP reported lower earnings of $0.10 versus $0.79 in the prior year. This year, the market expects an improvement in earnings ($0.77 versus $0.10).
  • Net operating cash flow has significantly decreased to -$105.35 million or 202.67% 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 36.68%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 100.00% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.

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