Trade-Ideas: Fifth Third Bancorp (FITB) Is Today's Weak On High Relative Volume Stock

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

  • FITB has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $168.8 million.
  • FITB has traded 8.0 million shares today.
  • FITB is trading at 6.45 times the normal volume for the stock at this time of day.
  • FITB 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 FITB:

Fifth Third Bancorp operates as a diversified financial services company in the United States. The company operates through four segments: Commercial Banking, Branch Banking, Consumer Lending, and Investment Advisors. The stock currently has a dividend yield of 2.5%. FITB has a PE ratio of 11.4. Currently there are 11 analysts that rate Fifth Third Bancorp a buy, 1 analyst rates it a sell, and 10 rate it a hold.

The average volume for Fifth Third Bancorp has been 8.6 million shares per day over the past 30 days. Fifth Third has a market cap of $16.6 billion and is part of the financial sector and banking industry. The stock has a beta of 1.45 and a short float of 3.7% with 3.50 days to cover. Shares are up 24.1% year to date as of the close of trading on Tuesday.

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

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Fifth Third Bancorp as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • FITB's revenue growth has slightly outpaced the industry average of 3.4%. Since the same quarter one year prior, revenues slightly increased by 2.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 40.26% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, FITB should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • FIFTH THIRD BANCORP's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, FIFTH THIRD BANCORP increased its bottom line by earning $1.66 versus $1.18 in the prior year. This year, the market expects an improvement in earnings ($1.70 versus $1.66).
  • The gross profit margin for FIFTH THIRD BANCORP is currently very high, coming in at 90.28%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 24.28% trails the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, FIFTH THIRD BANCORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

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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