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Trade-Ideas LLC identified

Textainer Group Holdings

(

TGH

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

  • TGH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.2 million.
  • TGH has traded 276,854 shares today.
  • TGH is trading at 16.00 times the normal volume for the stock at this time of day.
  • TGH is trading at a new low 15.01% 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 TGH:

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TheStreet Recommends

Textainer Group Holdings Limited, together with its subsidiaries, engages in the purchase, ownership, management, leasing, and disposal of a fleet of intermodal containers worldwide. It operates through three segments: Container Ownership, Container Management, and Container Resale. The stock currently has a dividend yield of 9.6%. TGH has a PE ratio of 6. Currently there is 1 analyst that rates Textainer Group Holdings a buy, 2 analysts rate it a sell, and 6 rate it a hold.

The average volume for Textainer Group Holdings has been 518,700 shares per day over the past 30 days. Textainer Group has a market cap of $1.1 billion and is part of the services sector and diversified services industry. The stock has a beta of 1.56 and a short float of 19.8% with 12.66 days to cover. Shares are down 40.6% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Textainer Group Holdings as a

hold

. The company's strengths can be seen in multiple areas, such as its increase in net income, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and disappointing return on equity.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Trading Companies & Distributors industry. The net income increased by 21.9% when compared to the same quarter one year prior, going from $33.01 million to $40.26 million.
  • The gross profit margin for TEXTAINER GROUP HOLDINGS LTD is currently very high, coming in at 88.12%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 29.13% significantly outperformed against the industry average.
  • Net operating cash flow has slightly increased to $88.21 million or 4.85% when compared to the same quarter last year. Despite an increase in cash flow, TEXTAINER GROUP HOLDINGS LTD's average is still marginally south of the industry average growth rate of 10.54%.
  • 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. Compared to other companies in the Trading Companies & Distributors industry and the overall market on the basis of return on equity, TEXTAINER GROUP HOLDINGS LTD has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • TGH'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 41.63%, 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. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.

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