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

  • CONN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.9 million.
  • CONN has traded 591,398 shares today.
  • CONN is trading at 15.85 times the normal volume for the stock at this time of day.
  • CONN is trading at a new low 21.09% 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 CONN:

Conn's, Inc. operates as a specialty retailer of durable consumer goods and related services in the United States. It operates through Retail and Credit segments. CONN has a PE ratio of 14. Currently there are 2 analysts that rate Conn's a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Conn's has been 922,900 shares per day over the past 30 days. Conn's has a market cap of $510.1 million and is part of the services sector and retail industry. The stock has a beta of 2.74 and a short float of 33.3% with 10.55 days to cover. Shares are down 33.3% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Conn's as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, generally higher debt management risk and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Specialty Retail industry average. The net income increased by 21.0% when compared to the same quarter one year prior, going from -$3.06 million to -$2.42 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.9%. Since the same quarter one year prior, revenues slightly increased by 6.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The gross profit margin for CONN'S INC is rather high; currently it is at 55.15%. 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 -0.61% trails the industry average.
  • Currently the debt-to-equity ratio of 1.83 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 4.90, which shows the ability to cover short-term cash needs.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Specialty Retail industry and the overall market, CONN'S INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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