Trade-Ideas LLC identified

Stage Stores

(

SSI

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

  • SSI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $17.2 million.
  • SSI has traded 139,602 shares today.
  • SSI is trading at 2.52 times the normal volume for the stock at this time of day.
  • SSI is trading at a new low 4.03% 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 SSI:

Stage Stores, Inc. operates as a specialty department store retailer in small and mid-sized towns and communities in the United States. Its merchandise portfolio comprises moderately priced brand name and private label apparel, accessories, cosmetics, footwear, and home goods. The stock currently has a dividend yield of 7.3%. SSI has a PE ratio of 8. Currently there is 1 analyst that rates Stage Stores a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Stage Stores has been 913,400 shares per day over the past 30 days. Stage Stores has a market cap of $261.9 million and is part of the services sector and retail industry. The stock has a beta of 1.69 and a short float of 22.9% with 2.62 days to cover. Shares are down 60.5% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Stage Stores as a

hold

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:

  • The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.08 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • SSI, with its decline in revenue, slightly underperformed the industry average of 4.2%. Since the same quarter one year prior, revenues slightly dropped by 3.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for STAGE STORES INC is currently lower than what is desirable, coming in at 26.48%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.89% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$43.94 million or 1820.36% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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