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

  • LL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.2 million.
  • LL has traded 686,938 shares today.
  • LL is trading at 9.96 times the normal volume for the stock at this time of day.
  • LL is trading at a new low 11.01% 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 LL:

Lumber Liquidators Holdings, Inc., together with its subsidiaries, operates as a multi-channel specialty retailer of hardwood flooring, and hardwood flooring enhancements and accessories. Currently there are no analysts that rate Lumber Liquidators Holdings a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for Lumber Liquidators Holdings has been 1.2 million shares per day over the past 30 days. Lumber Liquidators has a market cap of $458.0 million and is part of the services sector and retail industry. The stock has a beta of 2.10 and a short float of 40% with 10.33 days to cover. Shares are down 2.2% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Lumber Liquidators Holdings as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

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 Specialty Retail industry. The net income has significantly decreased by 316.5% when compared to the same quarter one year ago, falling from -$7.78 million to -$32.40 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 Specialty Retail industry and the overall market, LUMBER LIQUIDATORS HLDGS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for LUMBER LIQUIDATORS HLDGS INC is currently lower than what is desirable, coming in at 32.59%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -13.87% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$8.20 million or 162.31% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The share price of LUMBER LIQUIDATORS HLDGS INC has not done very well: it is down 9.13% 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. 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.

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