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

  • TPX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $87.3 million.
  • TPX has traded 117,985 shares today.
  • TPX is trading at 3.09 times the normal volume for the stock at this time of day.
  • TPX is trading at a new low 3.07% 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 TPX:

Tempur Sealy International, Inc., together with its subsidiaries, develops, manufactures, markets, and distributes bedding products worldwide. It operates through two segments, North America and International. TPX has a PE ratio of 53. Currently there are 6 analysts that rate Tempur Sealy International a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Tempur Sealy International has been 1.3 million shares per day over the past 30 days. Tempur Sealy International has a market cap of $3.9 billion and is part of the consumer goods sector and consumer durables industry. The stock has a beta of 1.22 and a short float of 12.6% with 5.24 days to cover. Shares are down 10.3% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Tempur Sealy International as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • TPX's revenue growth has slightly outpaced the industry average of 2.0%. Since the same quarter one year prior, revenues slightly increased by 2.9%. 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 significantly increased by 127.99% to $101.00 million when compared to the same quarter last year. In addition, TEMPUR SEALY INTL INC has also vastly surpassed the industry average cash flow growth rate of -13.69%.
  • 42.96% is the gross profit margin for TEMPUR SEALY INTL INC which we consider to be strong. 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 -1.47% trails the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Household Durables industry. The net income has significantly decreased by 124.2% when compared to the same quarter one year ago, falling from $46.60 million to -$11.30 million.
  • The debt-to-equity ratio is very high at 5.01 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, TPX maintains a poor quick ratio of 0.75, which illustrates the inability to avoid short-term cash problems.

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