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 BJ's Restaurants ( BJRI) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified BJ's Restaurants as such a stock due to the following factors:

  • BJRI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.0 million.
  • BJRI has traded 206,994 shares today.
  • BJRI is trading at 4.01 times the normal volume for the stock at this time of day.
  • BJRI 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 BJRI:

BJ's Restaurants, Inc. owns and operates casual dining restaurants in the Unites States. The company's restaurants offer pizzas, beers, appetizers, entrees, pastas, sandwiches, salads, and desserts. BJRI has a PE ratio of 42. Currently there are 5 analysts that rate BJ's Restaurants a buy, 2 analysts rate it a sell, and 8 rate it a hold.

The average volume for BJ's Restaurants has been 328,100 shares per day over the past 30 days. BJ's has a market cap of $1.3 billion and is part of the services sector and leisure industry. The stock has a beta of 1.87 and a short float of 16.5% with 9.76 days to cover. Shares are up 1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates BJ's Restaurants as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 7.3%. Since the same quarter one year prior, revenues slightly increased by 9.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • BJ'S RESTAURANTS INC 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 year. We feel that this trend should continue. During the past fiscal year, BJ'S RESTAURANTS INC increased its bottom line by earning $0.98 versus $0.74 in the prior year. This year, the market expects an improvement in earnings ($1.40 versus $0.98).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 106.4% when compared to the same quarter one year prior, rising from $4.66 million to $9.62 million.
  • Net operating cash flow has slightly increased to $30.83 million or 4.92% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -11.01%.
  • Powered by its strong earnings growth of 125.00% and other important driving factors, this stock has surged by 37.51% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

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