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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 $14.8 million.
  • TGH has traded 50,388 shares today.
  • TGH is trading at 2.25 times the normal volume for the stock at this time of day.
  • TGH is trading at a new low 3.18% 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 6.6%. TGH has a PE ratio of 5. Currently there is 1 analyst that rates Textainer Group Holdings a buy, 1 analyst rates it a sell, and 7 rate it a hold.

The average volume for Textainer Group Holdings has been 570,200 shares per day over the past 30 days. Textainer Group has a market cap of $829.6 million and is part of the services sector and diversified services industry. The stock has a beta of 1.78 and a short float of 17.9% with 3.78 days to cover. Shares are down 58.7% year-to-date as of the close of trading on Thursday.

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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 expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and generally higher debt management risk.

Highlights from the ratings report include:

  • The gross profit margin for TEXTAINER GROUP HOLDINGS LTD is currently very high, coming in at 87.11%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.29% trails the industry average.
  • Net operating cash flow has slightly increased to $100.37 million or 3.65% 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 11.23%.
  • TGH, with its decline in revenue, slightly underperformed the industry average of 0.1%. Since the same quarter one year prior, revenues slightly dropped by 6.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Trading Companies & Distributors industry and the overall market, TEXTAINER GROUP HOLDINGS LTD's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Trading Companies & Distributors industry. The net income has significantly decreased by 81.8% when compared to the same quarter one year ago, falling from $54.30 million to $9.89 million.

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