Trade-Ideas LLC identified

Sears Holdings

(

SHLD

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

  • SHLD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.8 million.
  • SHLD has traded 50,701 shares today.
  • SHLD is trading at 2.92 times the normal volume for the stock at this time of day.
  • SHLD is trading at a new low 4.01% 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 SHLD:

Sears Holdings Corporation operates as a retailer in the United States. It operates in two segments, Kmart and Sears Domestic. Currently there are no analysts that rate Sears Holdings a buy, 1 analyst rates it a sell, and none rate it a hold.

The average volume for Sears Holdings has been 591,200 shares per day over the past 30 days. Sears has a market cap of $2.4 billion and is part of the services sector and retail industry. The stock has a beta of 1.95 and a short float of 90% with 19.69 days to cover. Shares are down 31.9% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Sears Holdings as a

sell

. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow, generally disappointing historical performance in the stock itself and poor profit margins.

Highlights from the ratings report include:

  • Net operating cash flow has significantly decreased to -$297.00 million or 58.82% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • SHLD'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 34.85%, 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.
  • The gross profit margin for SEARS HOLDINGS CORP is rather low; currently it is at 23.10%. Regardless of SHLD's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SHLD's net profit margin of 3.34% compares favorably to the industry average.
  • SHLD, with its decline in revenue, underperformed when compared the industry average of 6.0%. Since the same quarter one year prior, revenues fell by 22.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • SEARS HOLDINGS CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SEARS HOLDINGS CORP reported poor results of -$15.83 versus -$12.86 in the prior year. This year, the market expects an improvement in earnings (-$10.29 versus -$15.83).

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