Omega Protein (OME) Highlighted As 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 Omega Protein ( OME) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Omega Protein as such a stock due to the following factors:

  • OME has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.7 million.
  • OME has traded 74,607 shares today.
  • OME is trading at 7.16 times the normal volume for the stock at this time of day.
  • OME is trading at a new low 5.06% 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 OME:

Omega Protein Corporation, a nutritional ingredient company, produces Omega-3 fish oil and specialty fish meal products. The company operates in two segments, Animal Nutrition and Human Nutrition. OME has a PE ratio of 12.9. Currently there are no analysts that rate Omega Protein a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Omega Protein has been 218,100 shares per day over the past 30 days. Omega Protein has a market cap of $315.9 million and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 2.27 and a short float of 7% with 4.49 days to cover. Shares are up 1.3% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Omega Protein as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year, attractive valuation levels and compelling growth in net income. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • OME's very impressive revenue growth greatly exceeded the industry average of 1.5%. Since the same quarter one year prior, revenues leaped by 72.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • OME's debt-to-equity ratio is very low at 0.08 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, OME has a quick ratio of 2.20, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 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. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food Products industry. The net income increased by 66.2% when compared to the same quarter one year prior, rising from $3.99 million to $6.63 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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