Columbia Sportswear (COLM) Highlighted As Weak On High Volume

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.

Trade-Ideas LLC identified Columbia Sportswear ( COLM) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Columbia Sportswear as such a stock due to the following factors:

  • COLM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $19.9 million.
  • COLM has traded 188,719 shares today.
  • COLM is trading at 20.67 times the normal volume for the stock at this time of day.
  • COLM is trading at a new low 6.03% 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 COLM:

Columbia Sportswear Company designs, sources, markets, and distributes outdoor and active lifestyle apparel, footwear, accessories, and equipment in the United States, Latin America, the Asia Pacific, Europe, the Middle East, Africa, and Canada. The stock currently has a dividend yield of 0.9%. COLM has a PE ratio of 32.8. Currently there are 3 analysts that rate Columbia Sportswear a buy, 2 analysts rate it a sell, and 4 rate it a hold.

The average volume for Columbia Sportswear has been 410,400 shares per day over the past 30 days. Columbia has a market cap of $4.5 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.50 and a short float of 4.9% with 2.50 days to cover. Shares are up 43% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Columbia Sportswear as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. 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 10.9%. Since the same quarter one year prior, revenues rose by 26.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • COLM's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, COLM has a quick ratio of 2.10, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Powered by its strong earnings growth of 50.47% and other important driving factors, this stock has surged by 50.31% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, COLM should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • COLUMBIA SPORTSWEAR CO reported significant earnings per share improvement 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, COLUMBIA SPORTSWEAR CO increased its bottom line by earning $1.95 versus $1.35 in the prior year. This year, the market expects an improvement in earnings ($2.18 versus $1.95).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry. The net income increased by 51.4% when compared to the same quarter one year prior, rising from $36.73 million to $55.60 million.

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