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 First Republic Bank ( FRC) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified First Republic Bank as such a stock due to the following factors:

  • FRC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $51.5 million.
  • FRC has traded 232,954 shares today.
  • FRC is trading at 9.77 times the normal volume for the stock at this time of day.
  • FRC is trading at a new high 3.01% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 FRC:

First Republic Bank, together with its subsidiaries, provides personalized, relationship-based preferred banking, preferred business banking, real estate lending, trust, and wealth management services to clients in metropolitan areas of the United States. The stock currently has a dividend yield of 1.2%. FRC has a PE ratio of 18.2. Currently there are 8 analysts that rate First Republic Bank a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for First Republic Bank has been 1.3 million shares per day over the past 30 days. First Republic has a market cap of $6.6 billion and is part of the financial sector and banking industry. Shares are down 8% 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 First Republic Bank as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and expanding profit margins. 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 came in higher than the industry average of 12.8%. Since the same quarter one year prior, revenues rose by 13.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Commercial Banks industry average. The net income increased by 7.4% when compared to the same quarter one year prior, going from $112.47 million to $120.83 million.
  • The gross profit margin for FIRST REPUBLIC BANK is currently very high, coming in at 86.83%. Regardless of FRC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, FRC's net profit margin of 27.02% significantly outperformed against the industry.
  • FIRST REPUBLIC BANK reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, FIRST REPUBLIC BANK increased its bottom line by earning $3.11 versus $2.76 in the prior year. For the next year, the market is expecting a contraction of 5.1% in earnings ($2.95 versus $3.11).
  • In its most recent trading session, FRC 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. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

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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