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

  • FRAN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $23.1 million.
  • FRAN has traded 111,388 shares today.
  • FRAN is trading at 2.89 times the normal volume for the stock at this time of day.
  • FRAN is trading at a new low 3.04% 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 FRAN:

Francesca's Holdings Corporation, through its subsidiaries, operates a chain of retail boutiques. It offers fashion apparel, jewelry, accessories, and gifts primarily for women between the ages of 18 and 35. FRAN has a PE ratio of 26. Currently there are 5 analysts that rate Francescas Holdings a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Francescas Holdings has been 814,400 shares per day over the past 30 days. Francescas has a market cap of $796.1 million and is part of the services sector and retail industry. The stock has a beta of -0.01 and a short float of 10.5% with 3.17 days to cover. Shares are up 9.8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Francescas Holdings as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 9.9%. Since the same quarter one year prior, revenues rose by 25.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • FRAN has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, FRAN has a quick ratio of 2.15, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. 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.
  • FRANCESCAS HOLDINGS CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, FRANCESCAS HOLDINGS CORP increased its bottom line by earning $0.90 versus $0.75 in the prior year. This year, the market expects an improvement in earnings ($1.02 versus $0.90).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Specialty Retail industry. The net income increased by 145.4% when compared to the same quarter one year prior, rising from $5.97 million to $14.66 million.

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