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

  • FXCM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $10.6 million.
  • FXCM has traded 152,055 shares today.
  • FXCM is trading at 2.22 times the normal volume for the stock at this time of day.
  • FXCM is trading at a new low 3.00% 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 FXCM:

FXCM Inc., through its subsidiaries, provides online foreign exchange (FX) trading and related services to retail and institutional customers worldwide. The company operates in two segments, Retail Trading and Institutional Trading.

The average volume for FXCM has been 227,300 shares per day over the past 30 days. FXCM has a market cap of $63.6 million and is part of the financial sector and financial services industry. The stock has a beta of 1.25 and a short float of 10.7% with 0.58 days to cover. Shares are down 93.2% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates FXCM as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • Net operating cash flow has significantly decreased to -$24.34 million or 181.75% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • FXCM's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 94.83%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
  • FXCM INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, FXCM INC reported lower earnings of $3.10 versus $4.80 in the prior year.
  • FXCM, with its decline in revenue, underperformed when compared the industry average of 5.8%. Since the same quarter one year prior, revenues fell by 34.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 2979.0% when compared to the same quarter one year prior, rising from $2.39 million to $73.65 million.

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