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

  • DORM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.9 million.
  • DORM has traded 131,507 shares today.
  • DORM is trading at 3.07 times the normal volume for the stock at this time of day.
  • DORM is trading at a new high 3.00% 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 DORM:

Dorman Products, Inc. supplies automotive replacement parts, automotive hardware, brake products, and household hardware to the automotive aftermarket and mass merchandise markets. DORM has a PE ratio of 19. Currently there are 3 analysts that rate Dorman Products a buy, 2 analysts rate it a sell, and none rate it a hold.

The average volume for Dorman Products has been 273,500 shares per day over the past 30 days. Dorman has a market cap of $1.7 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 0.53 and a short float of 22.6% with 35.08 days to cover. Shares are down 3.3% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Dorman Products 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, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • DORM's revenue growth has slightly outpaced the industry average of 3.9%. Since the same quarter one year prior, revenues slightly increased by 2.7%. 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.
  • DORM 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. Along with this, the company maintains a quick ratio of 2.77, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has significantly increased by 113.60% to $23.80 million when compared to the same quarter last year. In addition, DORMAN PRODUCTS INC has also vastly surpassed the industry average cash flow growth rate of -32.89%.
  • DORMAN PRODUCTS INC's earnings per share declined by 6.3% 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, DORMAN PRODUCTS INC increased its bottom line by earning $2.48 versus $2.23 in the prior year. This year, the market expects an improvement in earnings ($2.73 versus $2.48).
  • 40.59% is the gross profit margin for DORMAN PRODUCTS INC which we consider to be strong. Regardless of DORM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, DORM's net profit margin of 11.32% compares favorably to the industry average.

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