Weak On High Volume: United Natural Foods (UNFI)

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

  • UNFI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $31.4 million.
  • UNFI has traded 144,048 shares today.
  • UNFI is trading at 8.91 times the normal volume for the stock at this time of day.
  • UNFI is trading at a new low 3.02% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in UNFI with the Ticky from Trade-Ideas. See the FREE profile for UNFI NOW at Trade-Ideas

More details on UNFI:

United Natural Foods, Inc., together with its subsidiaries, distributes and retails natural, organic, and specialty foods, as well as non-food products primarily in the United States and Canada. UNFI has a PE ratio of 26.0. Currently there are 10 analysts that rate United Natural Foods a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for United Natural Foods has been 431,000 shares per day over the past 30 days. United Natural has a market cap of $3.4 billion and is part of the services sector and wholesale industry. The stock has a beta of 1.18 and a short float of 6.9% with 6.61 days to cover. Shares are down 12.3% year-to-date as of the close of trading on Wednesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates United Natural Foods as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.5%. Since the same quarter one year prior, revenues rose by 23.0%. 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.
  • Net operating cash flow has significantly increased by 231.26% to $45.84 million when compared to the same quarter last year. In addition, UNITED NATURAL FOODS INC has also vastly surpassed the industry average cash flow growth rate of 30.52%.
  • UNITED NATURAL FOODS INC' earnings per share from the most recent quarter came in slightly below the year earlier 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, UNITED NATURAL FOODS INC increased its bottom line by earning $2.52 versus $2.18 in the prior year. This year, the market expects an improvement in earnings ($2.95 versus $2.52).
  • The current debt-to-equity ratio, 0.43, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.90 is somewhat weak and could be cause for future problems.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Food & Staples Retailing industry average. The net income has decreased by 0.4% when compared to the same quarter one year ago, dropping from $27.95 million to $27.84 million.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

More from Markets

Akorn's Stock Crashes as Germany's Fresenius Ends Takeover Amid Data Allegations

Akorn's Stock Crashes as Germany's Fresenius Ends Takeover Amid Data Allegations

Alphabet Earnings, Bond Yields Rise, Akorn Plunges - 5 Things You Must Know

Alphabet Earnings, Bond Yields Rise, Akorn Plunges - 5 Things You Must Know

Street Stats: The Mid-Term Elections May Be a Rollercoaster Ride for Investors

Street Stats: The Mid-Term Elections May Be a Rollercoaster Ride for Investors

Global Stocks Slip as 3% 10-Year Yields, Tech Weakness Unsettle Markets

Global Stocks Slip as 3% 10-Year Yields, Tech Weakness Unsettle Markets

Stocks Sputter as U.S. 10-Year Yields Test 3% Amid Commodity-Led Inflation Spike

Stocks Sputter as U.S. 10-Year Yields Test 3% Amid Commodity-Led Inflation Spike