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

Natural Grocers by Vitamin Cottage

(

NGVC

) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Natural Grocers by Vitamin Cottage as such a stock due to the following factors:

  • NGVC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.4 million.
  • NGVC has traded 91,453 shares today.
  • NGVC is trading at 35.43 times the normal volume for the stock at this time of day.
  • NGVC is trading at a new high 18.34% 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 NGVC:

TheStreet Recommends

Natural Grocers by Vitamin Cottage, Inc., together with its subsidiaries, operates natural and organic groceries and dietary supplement retail stores in the United States. NGVC has a PE ratio of 46.8. Currently there are 4 analysts that rate Natural Grocers by Vitamin Cottage a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Natural Grocers by Vitamin Cottage has been 139,900 shares per day over the past 30 days. Natural Grocers by Vitamin Cottage has a market cap of $631.0 million and is part of the services sector and retail industry. The stock has a beta of 1.14 and a short float of 24.3% with 11.43 days to cover. Shares are up 1% year-to-date as of the close of trading on Thursday.

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 Natural Grocers by Vitamin Cottage as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, premium valuation and poor profit margins.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 1.2%. Since the same quarter one year prior, revenues rose by 17.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • NATURAL GROCERS VITAMIN CTGE has improved earnings per share by 40.0% 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 two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, NATURAL GROCERS VITAMIN CTGE increased its bottom line by earning $0.60 versus $0.47 in the prior year. This year, the market expects an improvement in earnings ($0.65 versus $0.60).
  • NGVC's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.15 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • Net operating cash flow has decreased to $8.27 million or 21.73% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • NGVC's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 34.71%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, NGVC is still more expensive than most of the other companies in its industry.

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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