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

  • FINL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $21.6 million.
  • FINL has traded 98,206 shares today.
  • FINL is trading at 2.13 times the normal volume for the stock at this time of day.
  • FINL is trading at a new low 3.04% 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 FINL:

The Finish Line, Inc., together with its subsidiaries, operates as a specialty retailer of athletic shoes, apparel, and accessories in the United States. It operates Finish Line stores that offer athletic shoes, as well as apparel and accessories for men, women, and kids. The stock currently has a dividend yield of 1.4%. FINL has a PE ratio of 16. Currently there are 5 analysts that rate Finish Line a buy, 1 analyst rates it a sell, and 12 rate it a hold.

The average volume for Finish Line has been 793,800 shares per day over the past 30 days. Finish Line has a market cap of $1.2 billion and is part of the services sector and specialty retail industry. The stock has a beta of 1.65 and a short float of 7.8% with 4.64 days to cover. Shares are up 7.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Finish Line as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.1%. Since the same quarter one year prior, revenues slightly increased by 6.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • FINL has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign.
  • FINISH LINE 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, FINISH LINE INC increased its bottom line by earning $1.71 versus $1.56 in the prior year. This year, the market expects an improvement in earnings ($1.76 versus $1.71).
  • 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. In comparison to the other companies in the Specialty Retail industry and the overall market, FINISH LINE INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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