Copa Holdings (CPA) Weak On High Volume Today

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

  • CPA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $65.1 million.
  • CPA has traded 112,464 shares today.
  • CPA is trading at 4.55 times the normal volume for the stock at this time of day.
  • CPA is trading at a new low 3.01% 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 CPA:

Copa Holdings, S.A. provides airline passenger and cargo services in Latin America. It provides services within Colombia; and international flights from various cities in Colombia to Panama, Venezuela, Ecuador, Mexico, Cuba, Guatemala, and Costa Rica. The stock currently has a dividend yield of 3.1%. CPA has a PE ratio of 12.7. Currently there are 4 analysts that rate Copa Holdings a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Copa Holdings has been 439,100 shares per day over the past 30 days. Copa has a market cap of $4.2 billion and is part of the services sector and transportation industry. The stock has a beta of 1.09 and a short float of 0.5% with 0.96 days to cover. Shares are down 23.7% year-to-date as of the close of trading on Monday.

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 Copa Holdings as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity and compelling growth in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth significantly trails the industry average of 47.6%. Since the same quarter one year prior, revenues rose by 13.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.50, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.11, which illustrates the ability to avoid short-term cash problems.
  • COPA HOLDINGS SA 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. We feel that this trend should continue. During the past fiscal year, COPA HOLDINGS SA increased its bottom line by earning $9.63 versus $7.35 in the prior year. This year, the market expects an improvement in earnings ($10.71 versus $9.63).
  • 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 Airlines industry and the overall market on the basis of return on equity, COPA HOLDINGS SA has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Airlines industry average, but is greater than that of the S&P 500. The net income increased by 58.7% when compared to the same quarter one year prior, rising from $74.44 million to $118.17 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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