Today's Weak On High Volume Stock: Vince (VNCE)

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

  • VNCE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.3 million.
  • VNCE has traded 103,396 shares today.
  • VNCE is trading at 11.14 times the normal volume for the stock at this time of day.
  • VNCE is trading at a new low 5.03% 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 VNCE:

Vince Holding Corp. designs, merchandises, and sells various contemporary fashion brand products in the United States and internationally. It operates through two segments, Wholesale and Direct-To-Consumer. VNCE has a PE ratio of 17. Currently there are 4 analysts that rate Vince a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Vince has been 408,800 shares per day over the past 30 days. Vince has a market cap of $596.9 million and is part of the consumer goods sector and consumer non-durables industry. Shares are down 39.1% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Vince as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • The debt-to-equity ratio of 1.22 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, VNCE has a quick ratio of 0.53, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • VNCE's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 42.27%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • Net operating cash flow has significantly increased by 84.64% to $38.83 million when compared to the same quarter last year. Despite an increase in cash flow, VINCE HOLDING CORP's cash flow growth rate is still lower than the industry average growth rate of 133.22%.
  • 49.98% is the gross profit margin for VINCE HOLDING CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 11.11% is above that of the industry average.
  • VINCE HOLDING CORP has improved earnings per share by 21.7% 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, VINCE HOLDING CORP increased its bottom line by earning $0.94 versus $0.69 in the prior year. This year, the market expects an improvement in earnings ($1.03 versus $0.94).

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