Strong On High Volume: RetailMeNot (SALE)

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

  • SALE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $10.4 million.
  • SALE has traded 321,076 shares today.
  • SALE is trading at 24.24 times the normal volume for the stock at this time of day.
  • SALE is trading at a new high 16.04% 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 SALE:

RetailMeNot, Inc. operates a digital coupon marketplace. Its marketplace connects consumers with retailers and brands. SALE has a PE ratio of 36.1. Currently there are 4 analysts that rate RetailMeNot a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for RetailMeNot has been 766,800 shares per day over the past 30 days. RetailMeNot has a market cap of $967.5 million and is part of the services sector and media industry. Shares are up 20.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates RetailMeNot as a sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • SALE's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 38.35%, which is also worse than the performance of the S&P 500 Index. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • The gross profit margin for RETAILMENOT INC is currently very high, coming in at 94.48%. Regardless of SALE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 16.05% trails the industry average.
  • When compared to other companies in the Internet Software & Services industry and the overall market, RETAILMENOT INC's return on equity is below that of both the industry average and the S&P 500.
  • RETAILMENOT INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, RETAILMENOT INC increased its bottom line by earning $0.50 versus $0.47 in the prior year. This year, the market expects an improvement in earnings ($0.96 versus $0.50).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Internet Software & Services industry average. The net income increased by 1.4% when compared to the same quarter one year prior, going from $13.84 million to $14.04 million.

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