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

  • TRUE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.3 million.
  • TRUE has traded 177,672 shares today.
  • TRUE is trading at 6.12 times the normal volume for the stock at this time of day.
  • TRUE is trading at a new high 4.02% 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.

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More details on TRUE:

TrueCar, Inc., together with its subsidiaries, operates as an Internet-based information, technology, and communication services company. The company operates its platform on the TrueCar Website and TrueCar mobile applications. Currently there are no analysts that rate TrueCar a buy, 1 analyst rates it a sell, and 6 rate it a hold.

The average volume for TrueCar has been 781,600 shares per day over the past 30 days. TrueCar has a market cap of $560.4 million and is part of the technology sector and internet industry. The stock has a beta of 0.63 and a short float of 17.6% with 12.22 days to cover. Shares are down 24.4% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates TrueCar as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Internet Software & Services industry average, but is greater than that of the S&P 500. The net income has decreased by 0.4% when compared to the same quarter one year ago, dropping from -$11.62 million to -$11.67 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Internet Software & Services industry and the overall market, TRUECAR INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • TRUE's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 55.49%, which is also worse than the performance of the S&P 500 Index. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • TRUECAR INC reported flat earnings per share in the most recent quarter. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, TRUECAR INC reported poor results of -$0.78 versus -$0.52 in the prior year. This year, the market expects an improvement in earnings (-$0.30 versus -$0.78).
  • The gross profit margin for TRUECAR INC is currently very high, coming in at 89.94%. Regardless of TRUE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TRUE's net profit margin of -18.86% significantly underperformed when compared to the industry average.

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