Strong On High Relative Volume: Famous Dave's Of America (DAVE)

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 Famous Dave's of America ( DAVE) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Famous Dave's of America as such a stock due to the following factors:

  • DAVE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.3 million
  • DAVE has traded 53,322 shares today
  • DAVE is trading at 3.12 times the normal volume for the stock at this time of day
  • DAVE is trading at a new high 5.03111659133069988314446163713000714778900146484375 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 DAVE:

Famous Dave's of America, Inc. develops, owns, operates, and franchises restaurants under the Famous Dave's name. It offers smoked, barbequed, and grilled meats, as well as entree items and delicious side dishes using prepared proprietary seasonings, sauces, and mixes. DAVE has a PE ratio of 55. Currently there is one analyst that rates Famous Dave's of America a buy, one analyst rates it a sell, and one rates it a hold.

The average volume for Famous Dave's of America has been 59,600 shares per day over the past 30 days. Famous Dave's of America has a market cap of $138.6 million and is part of the services sector and leisure industry. The stock has a beta of 1.29 and a short float of 26.1% with 6.43 days to cover. Shares are down 24.7% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Famous Dave's of America as a hold. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • The debt-to-equity ratio is somewhat low, currently at 0.64, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that DAVE's debt-to-equity ratio is low, the quick ratio, which is currently 0.58, displays a potential problem in covering short-term cash needs.
  • DAVE, with its decline in revenue, slightly underperformed the industry average of 7.4%. Since the same quarter one year prior, revenues slightly dropped by 8.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • FAMOUS DAVES OF AMERICA INC 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. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, FAMOUS DAVES OF AMERICA INC reported lower earnings of $0.39 versus $0.63 in the prior year. This year, the market expects an improvement in earnings ($0.65 versus $0.39).
  • The gross profit margin for FAMOUS DAVES OF AMERICA INC is rather low; currently it is at 21.05%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.60% significantly trails the industry average.
  • Net operating cash flow has significantly decreased to -$2.12 million or 382.04% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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