TAL Education Group (XRS) Is Weak On High Volume Today

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 TAL Education Group ( XRS) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified TAL Education Group as such a stock due to the following factors:

  • XRS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.8 million.
  • XRS has traded 73,666 shares today.
  • XRS is trading at 2.45 times the normal volume for the stock at this time of day.
  • XRS is trading at a new low 3.09% 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 XRS:

TAL Education Group, together with its subsidiaries, provides K-12 after-school tutoring services under the Xueersi brand name in China. XRS has a PE ratio of 33.8. Currently there are 3 analysts that rate TAL Education Group a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for TAL Education Group has been 585,500 shares per day over the past 30 days. TAL Education Group has a market cap of $2.5 billion and is part of the services sector and diversified services industry. Shares are up 42.9% year-to-date as of the close of trading on Wednesday.

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 TAL Education Group as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, notable return on equity, expanding profit margins and solid stock price performance. 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:
  • The revenue growth came in higher than the industry average of 5.8%. Since the same quarter one year prior, revenues rose by 33.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • TAL EDUCATION GROUP has improved earnings per share by 17.2% 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, TAL EDUCATION GROUP increased its bottom line by earning $0.75 versus $0.43 in the prior year. This year, the market expects an improvement in earnings ($1.01 versus $0.75).
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Diversified Consumer Services industry and the overall market, TAL EDUCATION GROUP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • The gross profit margin for TAL EDUCATION GROUP is rather high; currently it is at 56.49%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 23.79% significantly outperformed against the industry average.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 61.92% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

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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