Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified

Ethan Allen Interiors

(

ETH

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

  • ETH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.0 million.
  • ETH has traded 62,988 shares today.
  • ETH is trading at 6.53 times the normal volume for the stock at this time of day.
  • ETH is trading at a new low 8.08% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in ETH with the Ticky from Trade-Ideas. See the FREE profile for ETH NOW at Trade-Ideas

More details on ETH:

Ethan Allen Interiors Inc. operates as an interior design company and manufacturer and retailer of home furnishings in North America, Europe, Asia, and the Middle East. The company operates in two segments, Wholesale and Retail. The stock currently has a dividend yield of 1.8%. ETH has a PE ratio of 17.7. Currently there are 2 analysts that rate Ethan Allen Interiors a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Ethan Allen Interiors has been 235,600 shares per day over the past 30 days. Ethan Allen has a market cap of $780.3 million and is part of the consumer goods sector and consumer durables industry. The stock has a beta of 1.29 and a short float of 18% with 25.25 days to cover. Shares are down 14.5% year-to-date as of the close of trading on Monday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Ethan Allen Interiors as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.8%. Since the same quarter one year prior, revenues slightly increased by 2.0%. 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.
  • Net operating cash flow has significantly increased by 149.96% to $3.65 million when compared to the same quarter last year. In addition, ETHAN ALLEN INTERIORS INC has also vastly surpassed the industry average cash flow growth rate of 32.40%.
  • The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.76 is somewhat weak and could be cause for future problems.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

null