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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

Werner

(

WERN

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

  • WERN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $18.4 million.
  • WERN has traded 103,571 shares today.
  • WERN is trading at 6.32 times the normal volume for the stock at this time of day.
  • WERN is trading at a new low 5.00% 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 WERN:

TheStreet Recommends

Werner Enterprises, Inc., a transportation and logistics company, engages in transporting truckload shipments of general commodities in interstate and intrastate commerce. The company operates in two segments, Truckload Transportation Services and Value Added Services. The stock currently has a dividend yield of 0.7%. WERN has a PE ratio of 22.7. Currently there are 4 analysts that rate Werner a buy, 2 analysts rate it a sell, and 8 rate it a hold.

The average volume for Werner has been 622,800 shares per day over the past 30 days. Werner has a market cap of $2.2 billion and is part of the services sector and transportation industry. The stock has a beta of 0.58 and a short float of 8.7% with 6.31 days to cover. Shares are up 0.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Werner as a

buy

. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • WERNER ENTERPRISES INC 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 year. We feel that this trend should continue. During the past fiscal year, WERNER ENTERPRISES INC increased its bottom line by earning $1.36 versus $1.18 in the prior year. This year, the market expects an improvement in earnings ($1.60 versus $1.36).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Road & Rail industry average. The net income increased by 47.5% when compared to the same quarter one year prior, rising from $22.18 million to $32.71 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 13.6%. Since the same quarter one year prior, revenues slightly increased by 6.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • WERN's debt-to-equity ratio is very low at 0.09 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, WERN has a quick ratio of 1.83, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 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. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

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