Elizabeth Arden (RDEN) Strong On High Relative 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 Elizabeth Arden ( RDEN) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Elizabeth Arden as such a stock due to the following factors:

  • RDEN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.4 million.
  • RDEN has traded 166,252 shares today.
  • RDEN is trading at 2.18 times the normal volume for the stock at this time of day.
  • RDEN is trading at a new high 3.51% 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 RDEN:

Elizabeth Arden, Inc., a beauty products company, is engaged in the manufacture, distribution, marketing, and sale of fragrances, skin care, and cosmetic products worldwide. Currently there is 1 analyst that rates Elizabeth Arden a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Elizabeth Arden has been 169,100 shares per day over the past 30 days. Elizabeth Arden has a market cap of $431.1 million and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.63 and a short float of 34.9% with 20.00 days to cover. Shares are down 32.4% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Elizabeth Arden as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally high debt management risk, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Personal Products industry average. The net income has significantly decreased by 30.3% when compared to the same quarter one year ago, falling from -$26.44 million to -$34.45 million.
  • 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 Personal Products industry and the overall market, ELIZABETH ARDEN INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The debt-to-equity ratio of 1.45 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, RDEN's quick ratio is somewhat strong at 1.04, demonstrating the ability to handle short-term liquidity needs.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 46.45%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 32.58% compared to the year-earlier 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.
  • ELIZABETH ARDEN INC's earnings per share declined by 32.6% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ELIZABETH ARDEN INC swung to a loss, reporting -$4.91 versus $1.33 in the prior year. This year, the market expects an improvement in earnings (-$1.64 versus -$4.91).

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