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

First BanCorp

(

FBP

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

  • FBP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.6 million.
  • FBP has traded 219,057 shares today.
  • FBP is trading at 4.56 times the normal volume for the stock at this time of day.
  • FBP is trading at a new low 8.02% 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 FBP:

First BanCorp. operates as the bank holding company for FirstBank Puerto Rico that provides a range of financial products and services to retail, commercial, and institutional clients. FBP has a PE ratio of 3. Currently there are 3 analysts that rate First BanCorp a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for First BanCorp has been 807,200 shares per day over the past 30 days. First BanCorp has a market cap of $1.4 billion and is part of the financial sector and banking industry. The stock has a beta of 2.16 and a short float of 3.9% with 5.54 days to cover. Shares are up 9.5% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates First BanCorp as a

hold

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and notable return on equity. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good.

Highlights from the ratings report include:

  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 50.1% when compared to the same quarter one year prior, rising from $17.08 million to $25.65 million.
  • The gross profit margin for FIRST BANCORP P R is rather high; currently it is at 65.18%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, FBP's net profit margin of 14.93% significantly trails the industry average.
  • FBP, with its decline in revenue, slightly underperformed the industry average of 0.0%. Since the same quarter one year prior, revenues slightly dropped by 0.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • FIRST BANCORP P R reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, FIRST BANCORP P R turned its bottom line around by earning $1.86 versus -$0.80 in the prior year. For the next year, the market is expecting a contraction of 81.7% in earnings ($0.34 versus $1.86).

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