Trade-Ideas LLC identified

Under Armour

(

UA

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

  • UA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $222.1 million.
  • UA has traded 711,857 shares today.
  • UA is trading at 2.36 times the normal volume for the stock at this time of day.
  • UA is trading at a new low 3.00% 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 UA:

Under Armour, Inc. together with its subsidiaries, develops, markets, and distributes branded performance apparel, footwear, and accessories for men, women, and youth primarily in North America, Europe, the Middle East, Africa, the Asia-Pacific, and Latin America. UA has a PE ratio of 44. Currently there are 16 analysts that rate Under Armour a buy, 1 analyst rates it a sell, and 9 rate it a hold.

The average volume for Under Armour has been 6.2 million shares per day over the past 30 days. Under Armour has a market cap of $19.0 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of -0.05 and a short float of 14.2% with 8.68 days to cover. Shares are up 2.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Under Armour as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share and compelling growth in net income. 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 revenue growth came in higher than the industry average of 7.1%. Since the same quarter one year prior, revenues rose by 30.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • UNDER ARMOUR 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 two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, UNDER ARMOUR INC increased its bottom line by earning $1.05 versus $0.95 in the prior year. This year, the market expects an improvement in earnings ($1.16 versus $1.05).
  • 48.93% is the gross profit margin for UNDER ARMOUR INC which we consider to be strong. Regardless of UA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.83% trails the industry average.
  • 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 Textiles, Apparel & Luxury Goods industry and the overall market on the basis of return on equity, UNDER ARMOUR INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • UA has underperformed the S&P 500 Index, declining 6.46% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

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