Trade-Ideas: Cedar Fair (FUN) Is Today's Weak On High Relative Volume Stock

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

  • FUN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.4 million.
  • FUN has traded 76,500 shares today.
  • FUN is trading at 10.98 times the normal volume for the stock at this time of day.
  • FUN is trading at a new low 4.05% 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 FUN:

Cedar Fair, L.P. owns and operates amusement and water parks, and hotels in the United States and Canada. The company operates approximately 11 amusement parks, 3 outdoor water parks, 1 indoor water park, and 5 hotels. The stock currently has a dividend yield of 5%. FUN has a PE ratio of 32. Currently there are 5 analysts that rate Cedar Fair a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Cedar Fair has been 139,200 shares per day over the past 30 days. Cedar Fair has a market cap of $3.3 billion and is part of the services sector and leisure industry. The stock has a beta of 0.82 and a short float of 0.5% with 2.05 days to cover. Shares are up 26.1% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Cedar Fair as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, solid stock price performance and growth in earnings per share. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 7.3%. Since the same quarter one year prior, revenues rose by 15.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has increased to -$60.25 million or 27.63% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -11.30%.
  • 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. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • CEDAR FAIR -LP 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, CEDAR FAIR -LP reported lower earnings of $1.86 versus $1.94 in the prior year. This year, the market expects an improvement in earnings ($2.90 versus $1.86).
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Hotels, Restaurants & Leisure industry average. The net income has decreased by 0.3% when compared to the same quarter one year ago, dropping from -$83.54 million to -$83.83 million.

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