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

  • LEA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $104.6 million.
  • LEA has traded 102,900 shares today.
  • LEA is trading at 2.58 times the normal volume for the stock at this time of day.
  • LEA is trading at a new low 3.10% 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 LEA:

Lear Corporation designs, develops, engineers, manufactures, assembles, and supplies automotive seating, electrical distribution systems, and related components primarily to automotive original equipment manufacturers worldwide. It operates in two segments, Seating and Electrical. The stock currently has a dividend yield of 1.2%. LEA has a PE ratio of 11. Currently there are 8 analysts that rate Lear a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Lear has been 833,200 shares per day over the past 30 days. Lear has a market cap of $7.7 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 1.48 and a short float of 4.9% with 3.66 days to cover. Shares are down 13.7% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Lear as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 6.2%. Since the same quarter one year prior, revenues slightly increased by 3.8%. 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.
  • Net operating cash flow has increased to $585.10 million or 13.36% when compared to the same quarter last year. In addition, LEAR CORP has also modestly surpassed the industry average cash flow growth rate of 7.44%.
  • The debt-to-equity ratio is somewhat low, currently at 0.67, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.99 is somewhat weak and could be cause for future problems.
  • 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. In comparison to other companies in the Auto Components industry and the overall market on the basis of return on equity, LEAR CORP has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.

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