Strong On High Relative Volume: SFX Entertainment (SFXE)

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

  • SFXE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.3 million.
  • SFXE has traded 123,399 shares today.
  • SFXE is trading at 3.70 times the normal volume for the stock at this time of day.
  • SFXE is trading at a new high 5.46% 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 SFXE:

SFX Entertainment, Inc. is engaged in the production live events and digital entertainment content that focuses on the electronic music culture (EMC) and other festivals. Currently there are 2 analysts that rate SFX Entertainment a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for SFX Entertainment has been 791,200 shares per day over the past 30 days. SFX Entertainment has a market cap of $390.3 million and is part of the services sector and leisure industry. Shares are down 64.2% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates SFX Entertainment as a sell. Among the areas we feel are negative, one of the most important has been poor profit margins.

Highlights from the ratings report include:
  • The gross profit margin for SFX ENTERTAINMENT INC is rather low; currently it is at 23.34%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, SFXE's net profit margin of 1.86% is significantly lower than the industry average.
  • SFX ENTERTAINMENT INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. For the next year, the market is expecting a contraction of 22.9% in earnings (-$1.34 versus -$1.09).
  • Even though the current debt-to-equity ratio is 1.03, it is still below the industry average, suggesting that this level of debt is acceptable within the Media industry.
  • Compared to other companies in the Media industry and the overall market, SFX ENTERTAINMENT INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • SFXE's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 49.76%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter.

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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