Trade-Ideas: SpartanNash (SPTN) Is Today's Weak On High Relative Volume Stock

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

  • SPTN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.0 million.
  • SPTN has traded 56,981 shares today.
  • SPTN is trading at 8.66 times the normal volume for the stock at this time of day.
  • SPTN is trading at a new low 8.00% 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 SPTN:

SpartanNash Company operates as a grocery distributor and retailer primarily in the United States. The company operates in three segments: Military, Food Distribution, and Retail. The stock currently has a dividend yield of 2.2%. SPTN has a PE ratio of 16. Currently there are no analysts that rate SpartanNash a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for SpartanNash has been 224,300 shares per day over the past 30 days. SpartanNash has a market cap of $1.0 billion and is part of the services sector and wholesale industry. The stock has a beta of 0.90 and a short float of 2% with 3.58 days to cover. Shares are up 28.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates SpartanNash as a buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, attractive valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • SPARTANNASH CO has improved earnings per share by 43.8% 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. We feel that this trend should continue. During the past fiscal year, SPARTANNASH CO increased its bottom line by earning $1.68 versus $1.56 in the prior year. This year, the market expects an improvement in earnings ($2.12 versus $1.68).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food & Staples Retailing industry. The net income increased by 40.9% when compared to the same quarter one year prior, rising from $11.87 million to $16.73 million.
  • Net operating cash flow has significantly increased by 305.32% to $88.24 million when compared to the same quarter last year. In addition, SPARTANNASH CO has also vastly surpassed the industry average cash flow growth rate of 28.29%.
  • The debt-to-equity ratio is somewhat low, currently at 0.63, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that SPTN's debt-to-equity ratio is low, the quick ratio, which is currently 0.70, displays a potential problem in covering short-term cash needs.

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