Weak On High Volume: DSW (DSW)
Trade-Ideas LLC identified
(
) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified DSW as such a stock due to the following factors:
- DSW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $43.3 million.
- DSW has traded 2.3 million shares today.
- DSW is trading at 48.67 times the normal volume for the stock at this time of day.
- DSW is trading at a new low 12.01% 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 DSW:
DSW Inc., together with its subsidiaries, operates as a branded footwear and accessories retailer in the United States. The company operates through two segments, DSW and Affiliated Business Group. The stock currently has a dividend yield of 3.8%. DSW has a PE ratio of 14. Currently there are 4 analysts that rate DSW a buy, 2 analysts rate it a sell, and 8 rate it a hold.
The average volume for DSW has been 1.6 million shares per day over the past 30 days. DSW has a market cap of $1.7 billion and is part of the services sector and retail industry. Shares are down 8.9% year-to-date as of the close of trading on Monday.
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Analysis:
rates DSW as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and disappointing return on equity.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 13.2%. Since the same quarter one year prior, revenues slightly increased by 5.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- DSW has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.87 is somewhat weak and could be cause for future problems.
- The gross profit margin for DSW INC is currently lower than what is desirable, coming in at 27.35%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.75% trails that of the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Specialty Retail industry. The net income has significantly decreased by 61.8% when compared to the same quarter one year ago, falling from $30.78 million to $11.76 million.
- You can view the full DSW Ratings Report.
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