Papa John's International (PZZA) Is Today's Strong 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 Papa John's International ( PZZA) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Papa John's International as such a stock due to the following factors:

  • PZZA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $11.7 million.
  • PZZA has traded 50,386 shares today.
  • PZZA is trading at 5.23 times the normal volume for the stock at this time of day.
  • PZZA is trading at a new high 4.01% 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 PZZA:

Papa John's International, Inc. operates and franchises pizza delivery and carryout restaurants under the Papa John's trademark worldwide. The company also operates dine-in and delivery restaurants in certain international markets. The stock currently has a dividend yield of 1.1%. PZZA has a PE ratio of 31.0. Currently there are 4 analysts that rate Papa John's International a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Papa John's International has been 335,600 shares per day over the past 30 days. Papa John's International has a market cap of $2.1 billion and is part of the services sector and leisure industry. The stock has a beta of -0.16 and a short float of 5.2% with 7.35 days to cover. Shares are up 11.6% 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 Papa John's International as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, good cash flow from operations and increase in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 9.6%. Since the same quarter one year prior, revenues rose by 12.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • PAPA JOHNS INTERNATIONAL INC has improved earnings per share by 20.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, PAPA JOHNS INTERNATIONAL INC increased its bottom line by earning $1.55 versus $1.29 in the prior year. This year, the market expects an improvement in earnings ($1.73 versus $1.55).
  • Net operating cash flow has slightly increased to $30.26 million or 9.63% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -17.73%.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to other companies in the Hotels, Restaurants & Leisure industry and the overall market on the basis of return on equity, PAPA JOHNS INTERNATIONAL INC has underperformed in comparison with the industry average, but has greatly exceeded 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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