Strong On High Relative Volume: Kirkland's (KIRK)

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

  • KIRK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.3 million.
  • KIRK has traded 137,084 shares today.
  • KIRK is trading at 25.93 times the normal volume for the stock at this time of day.
  • KIRK is trading at a new high 13.05% 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 KIRK:

Kirkland's, Inc. operates as a specialty retailer of home decor and gifts in the United States. KIRK has a PE ratio of 25. Currently there are 5 analysts that rate Kirkland's a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Kirkland's has been 147,700 shares per day over the past 30 days. Kirkland's has a market cap of $431.5 million and is part of the services sector and retail industry. The stock has a beta of 1.38 and a short float of 6.8% with 9.58 days to cover. Shares are up 6.3% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Kirkland's 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, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • KIRK's revenue growth has slightly outpaced the industry average of 12.1%. Since the same quarter one year prior, revenues rose by 14.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • KIRK 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.
  • KIRKLAND'S INC has improved earnings per share by 26.1% 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, KIRKLAND'S INC increased its bottom line by earning $1.00 versus $0.82 in the prior year. This year, the market expects an improvement in earnings ($1.20 versus $1.00).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Specialty Retail industry average. The net income increased by 26.2% when compared to the same quarter one year prior, rising from $12.33 million to $15.55 million.
  • 42.91% is the gross profit margin for KIRKLAND'S INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 8.70% is above that of the industry average.

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