La-Z-Boy (LZB) Is Today's Strong On High 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 La-Z-Boy ( LZB) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified La-Z-Boy as such a stock due to the following factors:

  • LZB has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.3 million.
  • LZB has traded 53,224 shares today.
  • LZB is trading at 4.56 times the normal volume for the stock at this time of day.
  • LZB is trading at a new high 4.01% 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 LZB:

La-Z-Boy Incorporated manufactures, markets, imports, distributes, and retails upholstery furniture products, accessories, and casegoods furniture products in the United States and Canada. The stock currently has a dividend yield of 1.2%. LZB has a PE ratio of 21. Currently there are 5 analysts that rate La-Z-Boy a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for La-Z-Boy has been 262,300 shares per day over the past 30 days. La-Z-Boy has a market cap of $1.4 billion and is part of the consumer goods sector and consumer durables industry. The stock has a beta of 0.47 and a short float of 2.9% with 4.97 days to cover. Shares are up 1.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates La-Z-Boy 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, reasonable valuation levels, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • 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. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.6%. Since the same quarter one year prior, revenues slightly increased by 3.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • LZB's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, LZB has a quick ratio of 1.81, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 37.68% is the gross profit margin for LA-Z-BOY INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 5.01% is above that of the industry average.

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