Weight Watchers International (WTW) Is Weak On High Volume Today - TheStreet

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified

Weight Watchers International

(

WTW

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

  • WTW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $24.7 million.
  • WTW has traded 304,437 shares today.
  • WTW is trading at 10.90 times the normal volume for the stock at this time of day.
  • WTW is trading at a new low 13.00% 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 WTW:

Weight Watchers International, Inc. provides weight management services in North America, the United Kingdom, Continental Europe, Australia, New Zealand, and internationally. The company operates through North America, United Kingdom, Continental Europe, and Rest of World. WTW has a PE ratio of 9.6. Currently there are no analysts that rate Weight Watchers International a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Weight Watchers International has been 558,100 shares per day over the past 30 days. Weight Watchers International has a market cap of $1.6 billion and is part of the services sector and diversified services industry. The stock has a beta of 2.27 and a short float of 50.9% with 11.44 days to cover. Shares are down 10.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Weight Watchers International as a

hold

. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • Net operating cash flow has slightly increased to $64.65 million or 2.86% when compared to the same quarter last year. In addition, WEIGHT WATCHERS INTL INC has also modestly surpassed the industry average cash flow growth rate of -4.68%.
  • WTW, with its decline in revenue, underperformed when compared the industry average of 6.3%. Since the same quarter one year prior, revenues fell by 15.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • WEIGHT WATCHERS INTL INC's earnings per share declined by 17.4% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, WEIGHT WATCHERS INTL INC reported lower earnings of $3.63 versus $4.33 in the prior year. For the next year, the market is expecting a contraction of 50.4% in earnings ($1.80 versus $3.63).
  • 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 Diversified Consumer Services industry. The net income has decreased by 16.8% when compared to the same quarter one year ago, dropping from $64.92 million to $54.00 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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