Regional Management (RM) Weak On High Volume

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

  • RM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.1 million.
  • RM has traded 58,874 shares today.
  • RM is trading at 8.29 times the normal volume for the stock at this time of day.
  • RM is trading at a new low 3.09% 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 RM:

Regional Management Corp., a diversified specialty consumer finance company, provides various loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies, and other traditional lenders. RM has a PE ratio of 9.1. Currently there are 3 analysts that rate Regional Management a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Regional Management has been 114,600 shares per day over the past 30 days. Regional Management has a market cap of $228.7 million and is part of the financial sector and financial services industry. The stock has a beta of 1.57 and a short float of 7.6% with 2.16 days to cover. Shares are down 65.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Regional Management as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.0%. Since the same quarter one year prior, revenues rose by 21.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $13.92 million or 12.62% when compared to the same quarter last year. Despite an increase in cash flow, REGIONAL MANAGEMENT CORP's cash flow growth rate is still lower than the industry average growth rate of 41.91%.
  • The gross profit margin for REGIONAL MANAGEMENT CORP is rather low; currently it is at 24.56%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 9.30% trails that of the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Consumer Finance industry. The net income has significantly decreased by 31.1% when compared to the same quarter one year ago, falling from $6.40 million to $4.41 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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