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

  • TRUE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.9 million.
  • TRUE has traded 123,062 shares today.
  • TRUE is trading at 3.84 times the normal volume for the stock at this time of day.
  • TRUE is trading at a new low 3.09% 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 TRUE:

TrueCar, Inc. operates as an Internet-based information, technology, and communication services company. The company operates its platform on the TrueCar Website and TrueCar mobile applications. Currently there are no analysts that rate TrueCar a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for TrueCar has been 1.0 million shares per day over the past 30 days. TrueCar has a market cap of $512.7 million and is part of the technology sector and internet industry. The stock has a beta of 0.63 and a short float of 23.4% with 15.26 days to cover. Shares are down 38.9% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates TrueCar as a sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • TRUE'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 65.02%, 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. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Internet Software & Services industry average, but is greater than that of the S&P 500. The net income increased by 18.6% when compared to the same quarter one year prior, going from -$13.64 million to -$11.11 million.
  • Compared to other companies in the Internet Software & Services industry and the overall market, TRUECAR INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for TRUECAR INC is currently very high, coming in at 91.75%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -15.33% is in-line with the industry average.
  • Net operating cash flow has significantly increased by 79.88% to $2.75 million when compared to the same quarter last year. In addition, TRUECAR INC has also vastly surpassed the industry average cash flow growth rate of 2.80%.

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