Strong On High Volume: Asbury Automotive Group (ABG)

Trade-Ideas LLC identified Asbury Automotive Group ( ABG) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Asbury Automotive Group as such a stock due to the following factors:

  • ABG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $22.4 million.
  • ABG has traded 73,940 shares today.
  • ABG is trading at 4.42 times the normal volume for the stock at this time of day.
  • ABG is trading at a new high 5.26% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in ABG with the Ticky from Trade-Ideas. See the FREE profile for ABG NOW at Trade-Ideas

More details on ABG:

Asbury Automotive Group, Inc. operates as an automotive retailer in the United States. It offers a range of automotive products and services, including new and used vehicles; and vehicle repair and maintenance, replacement parts, and collision repair services. ABG has a PE ratio of 9. Currently there are 3 analysts that rate Asbury Automotive Group a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for Asbury Automotive Group has been 596,100 shares per day over the past 30 days. Asbury Automotive Group has a market cap of $1.5 billion and is part of the services sector and specialty retail industry. The stock has a beta of 1.33 and a short float of 7.5% with 3.99 days to cover. Shares are down 14.9% year-to-date as of the close of trading on Monday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Asbury Automotive Group as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and notable return on equity. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • 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 248.3% when compared to the same quarter one year prior, rising from $11.80 million to $41.10 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.9%. Since the same quarter one year prior, revenues slightly increased by 9.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ASBURY AUTOMOTIVE GROUP INC 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 two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, ASBURY AUTOMOTIVE GROUP INC increased its bottom line by earning $6.43 versus $3.71 in the prior year. For the next year, the market is expecting a contraction of 7.8% in earnings ($5.93 versus $6.43).
  • The debt-to-equity ratio is very high at 5.54 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.30, which clearly demonstrates the inability to cover short-term cash needs.
  • The gross profit margin for ASBURY AUTOMOTIVE GROUP INC is rather low; currently it is at 15.87%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.50% trails that of the industry average.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.