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

  • SIX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.8 million.
  • SIX has traded 105,431 shares today.
  • SIX is trading at 2.56 times the normal volume for the stock at this time of day.
  • SIX is trading at a new low 3.03% 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 SIX:

Six Flags Entertainment Corporation owns and operates regional theme and water parks. The company's parks offer various thrill rides, water attractions, themed areas, concerts and shows, restaurants, game venues, and retail outlets. The stock currently has a dividend yield of 5.1%. SIX has a PE ratio of 27.1. Currently there are 3 analysts that rate Six Flags Entertainment a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Six Flags Entertainment has been 687,700 shares per day over the past 30 days. Six Flags Entertainment has a market cap of $3.5 billion and is part of the services sector and leisure industry. The stock has a beta of 1.85 and a short float of 6.2% with 6.58 days to cover. Shares are up 0.5% year-to-date as of the close of trading on Thursday.

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 Six Flags Entertainment as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, good cash flow from operations, increase in net income and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • SIX's revenue growth has slightly outpaced the industry average of 5.6%. Since the same quarter one year prior, revenues slightly increased by 3.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 40.0% when compared to the same quarter one year prior, rising from $47.36 million to $66.31 million.
  • The gross profit margin for SIX FLAGS ENTERTAINMENT CORP is rather high; currently it is at 58.07%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 17.60% is above that of the industry average.
  • Net operating cash flow has slightly increased to $177.21 million or 2.52% when compared to the same quarter last year. In addition, SIX FLAGS ENTERTAINMENT CORP has also modestly surpassed the industry average cash flow growth rate of -5.65%.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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.

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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