Trade-Ideas LLC identified

Outerwall

(

OUTR

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

  • OUTR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $34.0 million.
  • OUTR has traded 410,563 shares today.
  • OUTR is trading at 3.26 times the normal volume for the stock at this time of day.
  • OUTR is trading at a new low 4.13% 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 OUTR:

Outerwall Inc., through its subsidiaries, provides automated retail solutions primarily in the United States, Canada, Puerto Rico, Ireland, and the United Kingdom. The stock currently has a dividend yield of 2.1%. OUTR has a PE ratio of 16. Currently there are 5 analysts that rate Outerwall a buy, 2 analysts rate it a sell, and 3 rate it a hold.

The average volume for Outerwall has been 454,700 shares per day over the past 30 days. Outerwall has a market cap of $1.0 billion and is part of the services sector and specialty retail industry. The stock has a beta of 1.15 and a short float of 49.9% with 10.17 days to cover. Shares are down 41.5% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Outerwall as a

hold

. The company's strengths can be seen in multiple areas, such as its increase in net income, good cash flow from operations 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 poor profit margins.

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 Specialty Retail industry. The net income increased by 108.7% when compared to the same quarter one year prior, rising from $17.89 million to $37.34 million.
  • Net operating cash flow has significantly increased by 72.40% to $85.56 million when compared to the same quarter last year. In addition, OUTERWALL INC has also vastly surpassed the industry average cash flow growth rate of 4.80%.
  • OUTERWALL INC 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, OUTERWALL INC reported lower earnings of $5.71 versus $7.39 in the prior year. This year, the market expects an improvement in earnings ($9.20 versus $5.71).
  • The gross profit margin for OUTERWALL INC is currently lower than what is desirable, coming in at 33.56%. Regardless of OUTR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 7.29% trails the industry average.
  • OUTR has underperformed the S&P 500 Index, declining 17.85% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

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