Strong On High Relative Volume: Sprouts Farmers Market (SFM) - TheStreet

Trade-Ideas LLC identified

Sprouts Farmers Market

(

SFM

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

  • SFM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $33.1 million.
  • SFM has traded 212,149 shares today.
  • SFM is trading at 2.33 times the normal volume for the stock at this time of day.
  • SFM is trading at a new high 3.01% 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 SFM:

Sprouts Farmers Market, Inc. operates as a specialty retailer of fresh, natural, and organic food in the United States. SFM has a PE ratio of 31. Currently there are 8 analysts that rate Sprouts Farmers Market a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Sprouts Farmers Market has been 2.1 million shares per day over the past 30 days. Sprouts Farmers Market has a market cap of $3.4 billion and is part of the services sector and retail industry. Shares are down 34.1% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Sprouts Farmers Market as a

sell

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

Highlights from the ratings report include:

  • SFM has underperformed the S&P 500 Index, declining 21.56% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
  • Net operating cash flow has decreased to $52.86 million or 14.22% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, SPROUTS FARMERS MARKET has marginally lower results.
  • The gross profit margin for SPROUTS FARMERS MARKET is currently lower than what is desirable, coming in at 31.10%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 3.47% is above that of the industry average.
  • The current debt-to-equity ratio, 0.37, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that SFM's debt-to-equity ratio is low, the quick ratio, which is currently 0.52, displays a potential problem in covering short-term cash needs.

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