TravelCenters Of America (TA): Today's Weak On High 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 TravelCenters of America ( TA) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified TravelCenters of America as such a stock due to the following factors:

  • TA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.6 million.
  • TA has traded 94,413 shares today.
  • TA is trading at 4.87 times the normal volume for the stock at this time of day.
  • TA is trading at a new low 10.09% 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 TA:

TravelCenters of America LLC operates and franchises travel centers primarily along the United States interstate highway system. TA has a PE ratio of 4.3. Currently there is 1 analyst that rates TravelCenters of America a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for TravelCenters of America has been 367,300 shares per day over the past 30 days. TravelCenters of America has a market cap of $378.6 million and is part of the services sector and specialty retail industry. The stock has a beta of 4.75 and a short float of 4.6% with 5.07 days to cover. Shares are up 4.8% year-to-date as of the close of trading on Friday.

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 TravelCenters of America as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:
  • TA's revenue growth has slightly outpaced the industry average of 1.5%. Since the same quarter one year prior, revenues slightly increased by 2.8%. 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 slightly increased to $52.15 million or 9.24% when compared to the same quarter last year. Despite an increase in cash flow, TRAVELCENTERS OF AMERICA LLC's cash flow growth rate is still lower than the industry average growth rate of 20.78%.
  • The current debt-to-equity ratio, 0.42, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.75 is somewhat weak and could be cause for future problems.
  • 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, TRAVELCENTERS OF AMERICA LLC's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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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