Trade-Ideas LLC identified

State Street

(

STT

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

  • STT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $180.2 million.
  • STT has traded 444,141 shares today.
  • STT is trading at 4.08 times the normal volume for the stock at this time of day.
  • STT is trading at a new low 5.07% 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 STT:

State Street Corporation provides a range of financial products and services to institutional investors worldwide. The stock currently has a dividend yield of 2.4%. STT has a PE ratio of 13. Currently there are 5 analysts that rate State Street a buy, 2 analysts rate it a sell, and 8 rate it a hold.

The average volume for State Street has been 3.2 million shares per day over the past 30 days. State Street has a market cap of $22.7 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.13 and a short float of 1.8% with 2.12 days to cover. Shares are down 16.2% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates State Street as a

hold

. The company's strengths can be seen in multiple areas, such as its increase in net income, attractive valuation levels and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and disappointing return on equity.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 17.1% when compared to the same quarter one year prior, going from $492.00 million to $576.00 million.
  • STATE STREET CORP has improved earnings per share by 19.6% 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, STATE STREET CORP reported lower earnings of $4.50 versus $4.57 in the prior year. This year, the market expects an improvement in earnings ($4.93 versus $4.50).
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, STATE STREET CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • STT'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 27.11%, 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.

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