Trade-Ideas LLC identified

Santander Consumer USA Holdings

(

SC

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

  • SC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $31.2 million.
  • SC has traded 368,735 shares today.
  • SC is trading at 15.36 times the normal volume for the stock at this time of day.
  • SC is trading at a new low 7.02% 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 SC:

TheStreet Recommends

Santander Consumer USA Holdings Inc., a specialized consumer finance company, provides vehicle finance and unsecured consumer lending products in the United States. The company's vehicle finance products and services include retail installment contracts, vehicle leases, and dealer loans. SC has a PE ratio of 8. Currently there are 5 analysts that rate Santander Consumer USA Holdings a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Santander Consumer USA Holdings has been 1.4 million shares per day over the past 30 days. Santander Consumer USA has a market cap of $7.9 billion and is part of the financial sector and real estate industry. Shares are up 14% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Santander Consumer USA Holdings as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk and weak operating cash flow.

Highlights from the ratings report include:

  • The debt-to-equity ratio is very high at 7.21 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • Net operating cash flow has decreased to $598.06 million or 43.44% when compared to the same quarter last year. Despite a decrease in cash flow of 43.44%, SANTANDER CONSUMER USA HLDGS is still significantly exceeding the industry average of -98.33%.
  • 47.89% is the gross profit margin for SANTANDER CONSUMER USA HLDGS which we consider to be strong. 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 15.08% trails the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Consumer Finance industry and the overall market, SANTANDER CONSUMER USA HLDGS's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.

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