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

  • TA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.1 million.
  • TA has traded 96,053 shares today.
  • TA is trading at 2.29 times the normal volume for the stock at this time of day.
  • TA is trading at a new low 3.08% 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 TA:

TravelCenters of America LLC operates and franchises travel centers primarily along the United States interstate highway system. TA has a PE ratio of 1. Currently there are 2 analysts that rate TravelCenters of America a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for TravelCenters of America has been 346,000 shares per day over the past 30 days. TravelCenters of America has a market cap of $289.1 million and is part of the services sector and specialty retail industry. The stock has a beta of 2.61 and a short float of 0.5% with 0.31 days to cover. Shares are down 20.5% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates TravelCenters of America as a hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.46, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.95 is somewhat weak and could be cause for future problems.
  • The revenue fell significantly faster than the industry average of 9.9%. Since the same quarter one year prior, revenues fell by 24.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Specialty Retail industry average. The net income has decreased by 23.2% when compared to the same quarter one year ago, dropping from $12.80 million to $9.83 million.
  • Net operating cash flow has decreased to $40.41 million or 31.80% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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