Today's Weak On High Volume Stock: Unum Group (UNM)

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

  • UNM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $67.5 million.
  • UNM has traded 97,658 shares today.
  • UNM is trading at 2.25 times the normal volume for the stock at this time of day.
  • UNM is trading at a new low 3.01% 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 UNM:

Unum Group, together with its subsidiaries, provides group and individual disability insurance products and services primarily in the United States and the United Kingdom. The company operates through three segments: Unum US, Unum UK, and Colonial Life. The stock currently has a dividend yield of 2%. UNM has a PE ratio of 1. Currently there are 4 analysts that rate Unum Group a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Unum Group has been 1.8 million shares per day over the past 30 days. Unum Group has a market cap of $8.7 billion and is part of the financial sector and insurance industry. The stock has a beta of 1.43 and a short float of 2.5% with 3.16 days to cover. Shares are up 10.7% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Unum Group as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, attractive valuation levels, growth in earnings per share and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 15.8%. Since the same quarter one year prior, revenues slightly increased by 2.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • UNUM GROUP's earnings per share improvement from the most recent quarter was slightly positive. 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, UNUM GROUP increased its bottom line by earning $3.50 versus $1.53 in the prior year. This year, the market expects an improvement in earnings ($3.80 versus $3.50).
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Insurance industry and the overall market on the basis of return on equity, UNUM GROUP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

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