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

  • BDBD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $11.3 million.
  • BDBD has traded 269,228 shares today.
  • BDBD is trading at 6.71 times the normal volume for the stock at this time of day.
  • BDBD is trading at a new low 3.04% 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 BDBD:

Boulder Brands Inc. provides health and wellness food solutions in the United States and Canada. The company operates in two segments, Natural and Balance. Currently there are 8 analysts that rate Boulder Brands a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Boulder Brands has been 664,300 shares per day over the past 30 days. Boulder has a market cap of $544.2 million and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 1.61 and a short float of 17.6% with 6.31 days to cover. Shares are down 37.5% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

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

Highlights from the ratings report include:
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Food Products industry and the overall market, BOULDER BRANDS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The debt-to-equity ratio of 1.24 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, BDBD's quick ratio is somewhat strong at 1.16, demonstrating the ability to handle short-term liquidity needs.
  • BDBD'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 36.66%, 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.
  • BOULDER BRANDS INC reported significant earnings per share improvement 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, BOULDER BRANDS INC swung to a loss, reporting -$2.09 versus $0.16 in the prior year. This year, the market expects an improvement in earnings ($0.26 versus -$2.09).
  • 42.79% is the gross profit margin for BOULDER BRANDS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 1.42% trails the industry average.

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