Strong On High Relative Volume: Perry Ellis International (PERY)

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 Perry Ellis International ( PERY) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Perry Ellis International as such a stock due to the following factors:

  • PERY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.4 million.
  • PERY has traded 51,668 shares today.
  • PERY is trading at 11.03 times the normal volume for the stock at this time of day.
  • PERY is trading at a new high 3.14% 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 PERY:

Perry Ellis International, Inc. is engaged in designing, sourcing, marketing, and licensing apparel products. Currently there are 2 analysts that rate Perry Ellis International a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Perry Ellis International has been 122,900 shares per day over the past 30 days. Perry Ellis International has a market cap of $361.7 million and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.03 and a short float of 6.9% with 5.77 days to cover. Shares are up 45.4% year-to-date as of the close of trading on Thursday.

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TheStreet Quant Ratings rates Perry Ellis International as a hold. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, increase in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Textiles, Apparel & Luxury Goods industry average. The net income increased by 42.9% when compared to the same quarter one year prior, rising from -$2.83 million to -$1.62 million.
  • Despite currently having a low debt-to-equity ratio of 0.48, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that PERY's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.69 is high and demonstrates strong liquidity.
  • The gross profit margin for ELLIS PERRY INTL INC is currently lower than what is desirable, coming in at 34.70%. Regardless of PERY's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, PERY's net profit margin of -0.79% significantly underperformed when compared to the industry average.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market, ELLIS PERRY INTL INC's return on equity significantly trails that of both the industry average and the S&P 500.


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