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

  • GDOT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.7 million.
  • GDOT has traded 191,538 shares today.
  • GDOT is trading at 2.60 times the normal volume for the stock at this time of day.
  • GDOT is trading at a new low 10.04% 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 GDOT:

Green Dot Corporation, together with its subsidiaries, operates as a pro-consumer technology bank holding company that provides personal banking for the masses. GDOT has a PE ratio of 15. Currently there are 2 analysts that rate Green Dot a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Green Dot has been 730,200 shares per day over the past 30 days. Green Dot has a market cap of $1.1 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.09 and a short float of 6.7% with 10.34 days to cover. Shares are up 0.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Green Dot as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 10.9%. Since the same quarter one year prior, revenues rose by 42.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • GDOT's debt-to-equity ratio is very low at 0.21 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.14, which illustrates the ability to avoid short-term cash problems.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • GREEN DOT CORP 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, GREEN DOT CORP increased its bottom line by earning $0.94 versus $0.77 in the prior year. This year, the market expects an improvement in earnings ($1.35 versus $0.94).
  • 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 166.7% when compared to the same quarter one year prior, rising from $15.31 million to $40.81 million.

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