Trade-Ideas LLC identified

Target

(

TGT

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

  • TGT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $397.4 million.
  • TGT has traded 1.6 million shares today.
  • TGT is trading at 2.58 times the normal volume for the stock at this time of day.
  • TGT 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 TGT:

Target Corporation operates as a general merchandise retailer. The stock currently has a dividend yield of 2.7%. TGT has a PE ratio of 16. Currently there are 10 analysts that rate Target a buy, 1 analyst rates it a sell, and 7 rate it a hold.

The average volume for Target has been 5.8 million shares per day over the past 30 days. Target has a market cap of $49.8 billion and is part of the services sector and retail industry. The stock has a beta of 0.58 and a short float of 6.2% with 8.09 days to cover. Shares are up 15.1% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Target as a

buy

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

Highlights from the ratings report include:

  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Multiline Retail industry and the overall market, TARGET CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • After a year of stock price fluctuations, the net result is that TGT's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • TARGET CORP 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, TARGET CORP increased its bottom line by earning $5.29 versus $3.82 in the prior year. This year, the market expects earnings to be in line with last year ($5.29 versus $5.29).
  • The debt-to-equity ratio is somewhat low, currently at 0.98, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.38 is very weak and demonstrates a lack of ability to pay short-term obligations.

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