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

  • DSW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $37.0 million.
  • DSW has traded 900,408 shares today.
  • DSW is trading at 16.35 times the normal volume for the stock at this time of day.
  • DSW is trading at a new high 6.13% 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 DSW:

DSW Inc., together with its subsidiaries, operates as a branded footwear and accessories retailer in the United States. The company operates through two segments, DSW and Affiliated Business Group. The stock currently has a dividend yield of 2.3%. DSW has a PE ratio of 21. Currently there are 9 analysts that rate DSW a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for DSW has been 1.0 million shares per day over the past 30 days. DSW has a market cap of $2.8 billion and is part of the services sector and retail industry. The stock has a beta of 0.37 and a short float of 4.1% with 3.22 days to cover. Shares are down 8.2% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates DSW as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year, growth in earnings per share, increase in net income and reasonable valuation levels. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • DSW's revenue growth has slightly outpaced the industry average of 10.3%. Since the same quarter one year prior, revenues rose by 12.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • DSW INC has improved earnings per share by 16.7% 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, DSW INC increased its bottom line by earning $1.69 versus $1.64 in the prior year. This year, the market expects an improvement in earnings ($1.88 versus $1.69).
  • 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 9.5% when compared to the same quarter one year prior, going from $28.11 million to $30.78 million.

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