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 Francescas Holdings ( FRAN) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Francescas Holdings as such a stock due to the following factors:

  • FRAN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.0 million.
  • FRAN has traded 86,234 shares today.
  • FRAN is trading at 5.79 times the normal volume for the stock at this time of day.
  • FRAN is trading at a new high 6.08% 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 FRAN:

Francesca's Holdings Corporation, through its subsidiaries, operates a chain of retail boutiques. It offers fashion apparel, jewelry, accessories, and gifts primarily for women between the ages of 18 and 35. FRAN has a PE ratio of 16. Currently there are 5 analysts that rate Francescas Holdings a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for Francescas Holdings has been 673,800 shares per day over the past 30 days. Francescas has a market cap of $492.2 million and is part of the services sector and retail industry. The stock has a beta of 0.02 and a short float of 15.5% with 11.13 days to cover. Shares are down 31.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Francescas Holdings as a hold. 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 and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • FRAN's revenue growth has slightly outpaced the industry average of 8.6%. Since the same quarter one year prior, revenues rose by 11.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • FRAN has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, FRAN has a quick ratio of 1.93, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for FRANCESCAS HOLDINGS CORP is rather high; currently it is at 51.27%. Regardless of FRAN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, FRAN's net profit margin of 7.62% compares favorably to the industry average.
  • 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 Specialty Retail industry average. The net income has decreased by 15.4% when compared to the same quarter one year ago, dropping from $8.56 million to $7.24 million.
  • In its most recent trading session, FRAN has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

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