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

  • BLMN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $36.3 million.
  • BLMN has traded 409,661 shares today.
  • BLMN is trading at 9.38 times the normal volume for the stock at this time of day.
  • BLMN is trading at a new low 5.04% 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 BLMN:

Bloomin' Brands, Inc., through its subsidiaries, owns and operates casual, upscale casual, and fine dining restaurants primarily in the United States. The stock currently has a dividend yield of 1.1%. BLMN has a PE ratio of 32.2. Currently there are 10 analysts that rate Bloomin Brands a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Bloomin Brands has been 1.9 million shares per day over the past 30 days. Bloomin has a market cap of $2.8 billion and is part of the services sector and leisure industry. The stock has a beta of 1.28 and a short float of 3.4% with 2.72 days to cover. Shares are down 7.5% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Bloomin Brands as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 7.0%. Since the same quarter one year prior, revenues slightly increased by 5.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • BLOOMIN' BRANDS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, BLOOMIN' BRANDS INC reported lower earnings of $0.71 versus $1.63 in the prior year. This year, the market expects an improvement in earnings ($1.29 versus $0.71).
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, BLOOMIN' BRANDS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • The gross profit margin for BLOOMIN' BRANDS INC is rather low; currently it is at 16.29%. Regardless of BLMN's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.02% trails the industry average.

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