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

  • RY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $66.9 million.
  • RY has traded 145,416 shares today.
  • RY is trading at 2.34 times the normal volume for the stock at this time of day.
  • RY 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 RY:

Royal Bank of Canada, together with its subsidiaries, operates as a diversified financial service company worldwide. The company operates in five segments: Personal & Commercial Banking; Wealth Management; Insurance; Investor & Treasury Services; and Capital Markets. The stock currently has a dividend yield of 4%. RY has a PE ratio of 12. Currently there are 2 analysts that rate Royal Bank of Canada a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Royal Bank of Canada has been 1.1 million shares per day over the past 30 days. Royal Bank of Canada has a market cap of $92.9 billion and is part of the financial sector and banking industry. Shares are up 10.8% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Royal Bank of Canada as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and good cash flow from operations. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • RY's revenue growth has slightly outpaced the industry average of 0.1%. Since the same quarter one year prior, revenues slightly increased by 7.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Commercial Banks industry average. The net income increased by 3.5% when compared to the same quarter one year prior, going from $2,473.00 million to $2,560.00 million.
  • The gross profit margin for ROYAL BANK OF CANADA is currently very high, coming in at 76.62%. Regardless of RY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 22.33% trails the industry average.
  • After a year of stock price fluctuations, the net result is that RY's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Commercial Banks industry and the overall market, ROYAL BANK OF CANADA's return on equity exceeds that of both the industry average and the S&P 500.

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