Strong On High Volume: Regions Financial (RF)

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

  • RF has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $128.5 million.
  • RF has traded 4.5 million shares today.
  • RF is trading at 4.80 times the normal volume for the stock at this time of day.
  • RF is trading at a new high 3.02% 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 RF:

Regions Financial Corporation, together with its subsidiaries, provides banking and bank-related services to individual and corporate customers in the United States. The company operates in three segments: Business Services, Consumer Services, and Wealth Management. The stock currently has a dividend yield of 2%. RF has a PE ratio of 12.2. Currently there are 11 analysts that rate Regions Financial a buy, 2 analysts rate it a sell, and 8 rate it a hold.

The average volume for Regions Financial has been 16.3 million shares per day over the past 30 days. Regions Financial has a market cap of $13.6 billion and is part of the financial sector and banking industry. The stock has a beta of 1.36 and a short float of 1% with 1.06 days to cover. Shares are up 0.7% 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 Regions Financial as a buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, expanding profit margins, increase in stock price during the past year and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • REGIONS FINANCIAL CORP has improved earnings per share by 10.0% 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 year. We feel that this trend should continue. During the past fiscal year, REGIONS FINANCIAL CORP increased its bottom line by earning $0.78 versus $0.75 in the prior year. This year, the market expects an improvement in earnings ($0.85 versus $0.78).
  • The gross profit margin for REGIONS FINANCIAL CORP is currently very high, coming in at 92.68%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 23.79% trails the industry average.
  • RF, with its decline in revenue, slightly underperformed the industry average of 4.6%. Since the same quarter one year prior, revenues slightly dropped by 1.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Commercial Banks industry average, but is greater than that of the S&P 500. The net income increased by 10.9% when compared to the same quarter one year prior, going from $293.00 million to $325.00 million.
  • In its most recent trading session, RF has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.

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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