Fresh Market (TFM) Is Strong On High Volume Today

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

  • TFM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $36.3 million.
  • TFM has traded 421,162 shares today.
  • TFM is trading at 3.75 times the normal volume for the stock at this time of day.
  • TFM is trading at a new high 3.03% 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 TFM:

The Fresh Market, Inc. operates as a specialty grocery retailer in the United States. TFM has a PE ratio of 19. Currently there are 4 analysts that rate Fresh Market a buy, 3 analysts rate it a sell, and 9 rate it a hold.

The average volume for Fresh Market has been 698,100 shares per day over the past 30 days. Fresh Market has a market cap of $1.6 billion and is part of the services sector and retail industry. The stock has a beta of 0.27 and a short float of 21.5% with 8.49 days to cover. Shares are down 22.2% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Fresh Market as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, notable return on equity and solid stock price performance. We feel its 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 5.8%. Since the same quarter one year prior, revenues slightly increased by 7.2%. 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 increased to $62.61 million or 11.46% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -24.81%.
  • FRESH MARKET INC's earnings per share declined by 8.8% in the most recent quarter compared to the same quarter a year ago. 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, FRESH MARKET INC increased its bottom line by earning $1.31 versus $1.05 in the prior year. This year, the market expects an improvement in earnings ($1.87 versus $1.31).
  • TFM's debt-to-equity ratio is very low at 0.09 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.73 is somewhat weak and could be cause for future problems.
  • 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. Compared to other companies in the Food & Staples Retailing industry and the overall market on the basis of return on equity, FRESH MARKET INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.

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