Today's Weak On High Volume Stock: Ascena Retail Group (ASNA)

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

  • ASNA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $16.4 million.
  • ASNA has traded 3.0 million shares today.
  • ASNA is trading at 41.10 times the normal volume for the stock at this time of day.
  • ASNA is trading at a new low 16.00% 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 ASNA:

Ascena Retail Group, Inc., through its subsidiaries, operates as a specialty retailer of apparel for women, and tween girls and boys. The company operates under the Justice, Lane Bryant, maurices, dressbarn, and Catherines segments. ASNA has a PE ratio of 17.4. Currently there are 4 analysts that rate Ascena Retail Group a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Ascena Retail Group has been 893,100 shares per day over the past 30 days. Ascena Retail Group has a market cap of $2.7 billion and is part of the services sector and retail industry. The stock has a beta of 1.53 and a short float of 3.7% with 4.00 days to cover. Shares are down 20% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Ascena Retail Group as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in net income. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • ASNA's revenue growth has slightly outpaced the industry average of 0.0%. Since the same quarter one year prior, revenues slightly increased by 0.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • ASNA's debt-to-equity ratio is very low at 0.13 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • Net operating cash flow has increased to $68.30 million or 14.21% when compared to the same quarter last year. Despite an increase in cash flow, ASCENA RETAIL GROUP INC's cash flow growth rate is still lower than the industry average growth rate of 24.41%.
  • 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. In comparison to the other companies in the Specialty Retail industry and the overall market, ASCENA RETAIL GROUP INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • In its most recent trading session, ASNA has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. This company's share value has not moved any higher or lower since its value 12 months ago.

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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