Strong On High Relative Volume: Deutsche Bank (DB)

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

  • DB has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $65.1 million.
  • DB has traded 1.2 million shares today.
  • DB is trading at 6.35 times the normal volume for the stock at this time of day.
  • DB is trading at a new high 6.01% 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 DB:

Deutsche Bank Aktiengesellschaft provides investment, financial, and related products and services worldwide. Its Corporate Banking & Securities division engages in selling, trading, and structuring a range of fixed income, equity, equity-linked, foreign exchange, and commodities products. The stock currently has a dividend yield of 2.7%. DB has a PE ratio of 35. Currently there are 2 analysts that rate Deutsche Bank a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Deutsche Bank has been 1.8 million shares per day over the past 30 days. Deutsche has a market cap of $43.2 billion and is part of the financial sector and banking industry. Shares are up 2% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Deutsche Bank as a sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and unimpressive growth in net income.

Highlights from the ratings report include:
  • The share price of DEUTSCHE BANK AG has not done very well: it is down 18.13% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Capital Markets industry. The net income has significantly decreased by 60.8% when compared to the same quarter one year ago, falling from $1,492.05 million to $584.31 million.
  • 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 Capital Markets industry and the overall market, DEUTSCHE BANK AG's return on equity significantly trails that of both the industry average and the S&P 500.
  • DB, with its decline in revenue, underperformed when compared the industry average of 5.7%. Since the same quarter one year prior, revenues fell by 12.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • DEUTSCHE BANK AG has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, DEUTSCHE BANK AG increased its bottom line by earning $1.83 versus $1.01 in the prior year. This year, the market expects an improvement in earnings ($2.25 versus $1.83).

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