Trade-Ideas LLC identified

Texas Capital

(

TCBI

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

  • TCBI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.9 million.
  • TCBI has traded 101,959 shares today.
  • TCBI is trading at 4.10 times the normal volume for the stock at this time of day.
  • TCBI is trading at a new low 8.00% 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 TCBI:

Texas Capital Bancshares, Inc. operates as the bank holding company for Texas Capital Bank, National Association that provides various banking products and services for commercial businesses, and professionals and entrepreneurs in Texas. TCBI has a PE ratio of 12. Currently there are 6 analysts that rate Texas Capital a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Texas Capital has been 741,400 shares per day over the past 30 days. Texas has a market cap of $1.6 billion and is part of the financial sector and banking industry. The stock has a beta of 1.61 and a short float of 8.1% with 6.18 days to cover. Shares are down 34.2% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Texas Capital as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and disappointing return on equity.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 0.2%. Since the same quarter one year prior, revenues rose by 11.4%. 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.
  • TEXAS CAPITAL BANCSHARES INC's earnings per share declined by 10.3% 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, TEXAS CAPITAL BANCSHARES INC increased its bottom line by earning $2.91 versus $2.87 in the prior year. This year, the market expects an improvement in earnings ($3.10 versus $2.91).
  • The gross profit margin for TEXAS CAPITAL BANCSHARES INC is currently very high, coming in at 83.97%. Regardless of TCBI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 20.91% trails the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Commercial Banks industry average, but is greater than that of the S&P 500. The net income has decreased by 8.1% when compared to the same quarter one year ago, dropping from $37.83 million to $34.75 million.
  • 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. When compared to other companies in the Commercial Banks industry and the overall market, TEXAS CAPITAL BANCSHARES INC's return on equity is below that of both the industry average and the S&P 500.

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