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

  • WRLD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.3 million.
  • WRLD has traded 501,796 shares today.
  • WRLD is trading at 90.47 times the normal volume for the stock at this time of day.
  • WRLD is trading at a new low 17.00% 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 WRLD:

World Acceptance Corporation engages in small-loan consumer finance business. The company offers short-term small and medium-term larger installment loans, related credit insurance and ancillary products and services to individuals. WRLD has a PE ratio of 7. Currently there are 2 analysts that rate World Acceptance a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for World Acceptance has been 245,600 shares per day over the past 30 days. World Acceptance has a market cap of $748.5 million and is part of the financial sector and financial services industry. The stock has a beta of 0.69 and a short float of 101.4% with 22.29 days to cover. Shares are up 4.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates World Acceptance as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, notable return on equity, expanding profit margins, impressive record of earnings per share growth and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Consumer Finance industry. The net income increased by 24.5% when compared to the same quarter one year prior, going from $38.98 million to $48.51 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 Consumer Finance industry and the overall market, WORLD ACCEPTANCE CORP/DE's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • 45.11% is the gross profit margin for WORLD ACCEPTANCE CORP/DE which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 32.04% significantly outperformed against the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.4%. Since the same quarter one year prior, revenues slightly dropped by 6.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • WORLD ACCEPTANCE CORP/DE reported significant earnings per share improvement 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 two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, WORLD ACCEPTANCE CORP/DE increased its bottom line by earning $11.84 versus $9.40 in the prior year. For the next year, the market is expecting a contraction of 1.8% in earnings ($11.63 versus $11.84).

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