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

  • MAIN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.0 million.
  • MAIN has traded 133,188 shares today.
  • MAIN is trading at 8.84 times the normal volume for the stock at this time of day.
  • MAIN is trading at a new low 4.01% 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 MAIN:

Main Street Capital Corporation is a business development company specializing in long- term equity and debt investments in small and lower middle market companies. The stock currently has a dividend yield of 7.5%. MAIN has a PE ratio of 13. Currently there are 5 analysts that rate Main Street Capital a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Main Street Capital has been 295,400 shares per day over the past 30 days. Main Street has a market cap of $1.4 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.19 and a short float of 7.5% with 14.66 days to cover. Shares are down 3.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Main Street Capital as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins, solid stock price performance and notable return on equity. We feel its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.5%. Since the same quarter one year prior, revenues rose by 17.2%. 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.
  • The gross profit margin for MAIN STREET CAPITAL CORP is currently very high, coming in at 84.88%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 48.50% significantly outperformed against the industry average.
  • After a year of stock price fluctuations, the net result is that MAIN's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Capital Markets industry and the overall market, MAIN STREET CAPITAL CORP's return on equity is below that of both the industry average and the S&P 500.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Capital Markets industry average. The net income has decreased by 4.2% when compared to the same quarter one year ago, dropping from $21.57 million to $20.67 million.

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