Macy's (M) Stock: 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 Macy's ( M) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Macy's as such a stock due to the following factors:

  • M has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $276.1 million.
  • M has traded 1.3 million shares today.
  • M is trading at 5.06 times the normal volume for the stock at this time of day.
  • M is trading at a new low 3.03% 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 M:

Macy's, Inc., together with its subsidiaries, operates stores and Internet Websites in the United States. Its stores and Websites sell a range of merchandise, including apparel and accessories for men, women, and children; cosmetics; home furnishings; and other consumer goods. The stock currently has a dividend yield of 2%. M has a PE ratio of 15.0. Currently there are 8 analysts that rate Macy's a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Macy's has been 5.2 million shares per day over the past 30 days. Macy's has a market cap of $21.4 billion and is part of the services sector and retail industry. The stock has a beta of 1.03 and a short float of 4.5% with 3.69 days to cover. Shares are up 17.5% 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. Analysis:

TheStreet Quant Ratings rates Macy's as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, increase in net income, notable return on equity and expanding profit margins. 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:
  • 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. 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.
  • MACY'S INC has improved earnings per share by 29.8% 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, MACY'S INC increased its bottom line by earning $3.90 versus $3.29 in the prior year. This year, the market expects an improvement in earnings ($4.35 versus $3.90).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Multiline Retail industry average. The net income increased by 22.6% when compared to the same quarter one year prior, going from $177.00 million to $217.00 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Multiline Retail industry and the overall market, MACY'S INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • 39.21% is the gross profit margin for MACY'S INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 3.50% is above that of the industry average.


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