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

  • SAFM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $38.7 million.
  • SAFM has traded 130,628 shares today.
  • SAFM is trading at 3.12 times the normal volume for the stock at this time of day.
  • SAFM is trading at a new high 5.01% 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 SAFM:

Sanderson Farms, Inc., an integrated poultry processing company, produces, processes, markets, and distributes fresh, frozen, and prepared chicken products in the United States. The stock currently has a dividend yield of 1.1%. SAFM has a PE ratio of 14. Currently there is 1 analyst that rates Sanderson Farms a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Sanderson Farms has been 408,200 shares per day over the past 30 days. Sanderson Farms has a market cap of $1.9 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 0.51 and a short float of 28.6% with 11.04 days to cover. Shares are up 6.6% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

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

Highlights from the ratings report include:
  • SAFM has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, SAFM has a quick ratio of 2.36, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has increased to $128.04 million or 37.56% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 3.11%.
  • After a year of stock price fluctuations, the net result is that SAFM'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. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • SAFM, with its decline in revenue, underperformed when compared the industry average of 16.6%. Since the same quarter one year prior, revenues slightly dropped by 3.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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