Trade-Ideas: EZCORP (EZPW) Is Today's Strong On High Relative Volume Stock

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

  • EZPW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.4 million.
  • EZPW has traded 58,697 shares today.
  • EZPW is trading at 2.34 times the normal volume for the stock at this time of day.
  • EZPW is trading at a new high 4.14% 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 EZPW:

EZCORP, Inc. provides pawn and consumer loans in the United States, Mexico, and Canada. The company operates in four segments: U.S. Pawn, Mexico Pawn, Grupo Finmart, and Other International. Currently there are no analysts that rate EZCORP a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for EZCORP has been 570,100 shares per day over the past 30 days. EZCORP has a market cap of $369.5 million and is part of the financial sector and financial services industry. The stock has a beta of 1.90 and a short float of 8.1% with 6.69 days to cover. Shares are up 35.7% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

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

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 when compared to that of the S&P 500 and the Consumer Finance industry. The net income has significantly decreased by 5619.4% when compared to the same quarter one year ago, falling from $1.34 million to -$74.13 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Consumer Finance industry and the overall market, EZCORP INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The share price of EZCORP INC has not done very well: it is down 11.62% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • EZCORP INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, EZCORP INC swung to a loss, reporting -$1.21 versus $0.49 in the prior year. This year, the market expects an improvement in earnings (-$0.24 versus -$1.21).
  • EZPW, with its decline in revenue, slightly underperformed the industry average of 3.6%. Since the same quarter one year prior, revenues slightly dropped by 1.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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