Williams-Sonoma (WSM) Weak On High Volume Today
Trade-Ideas LLC identified
(
) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Williams-Sonoma as such a stock due to the following factors:
- WSM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $66.6 million.
- WSM has traded 79,979 shares today.
- WSM is trading at 3.57 times the normal volume for the stock at this time of day.
- WSM is trading at a new low 4.02% 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 WSM:
Williams-Sonoma, Inc. operates as a multi-channel specialty retailer of various products for home. It operates through two segments, E-commerce and Retail. The stock currently has a dividend yield of 2.6%. WSM has a PE ratio of 17. Currently there are 7 analysts that rate Williams-Sonoma a buy, 2 analysts rate it a sell, and 10 rate it a hold.
The average volume for Williams-Sonoma has been 1.5 million shares per day over the past 30 days. Williams-Sonoma has a market cap of $5.1 billion and is part of the services sector and retail industry. The stock has a beta of 0.76 and a short float of 14.1% with 9.59 days to cover. Shares are down 0.7% year-to-date as of the close of trading on Tuesday.
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Analysis:
rates Williams-Sonoma as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and unimpressive growth in net income.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 11.1%. Since the same quarter one year prior, revenues slightly increased by 2.9%. 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.
- WSM 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. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.27 is very weak and demonstrates a lack of ability to pay short-term obligations.
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, WSM has underperformed the S&P 500 Index, declining 23.16% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Specialty Retail industry average. The net income has decreased by 4.0% when compared to the same quarter one year ago, dropping from $147.04 million to $141.13 million.
- You can view the full Williams-Sonoma Ratings Report.
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