Gentherm (THRM) Stock: Weak On High Volume Today

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

  • THRM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.3 million.
  • THRM has traded 180,600 shares today.
  • THRM is trading at 17.30 times the normal volume for the stock at this time of day.
  • THRM is trading at a new low 11.18% 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 THRM:

Gentherm Incorporated designs, develops, and manufactures thermal management technologies and automotive cable systems. The company operates through two segments, Automotive and Industrial. THRM has a PE ratio of 16. Currently there are 4 analysts that rate Gentherm a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Gentherm has been 275,200 shares per day over the past 30 days. Gentherm has a market cap of $1.4 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 2.00 and a short float of 4.2% with 8.13 days to cover. Shares are down 19.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Gentherm as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • THRM's revenue growth has slightly outpaced the industry average of 2.8%. Since the same quarter one year prior, revenues slightly increased by 4.3%. 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 current debt-to-equity ratio, 0.43, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, THRM has a quick ratio of 2.04, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 35.42% is the gross profit margin for GENTHERM INC which we consider to be strong. Regardless of THRM'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 5.51% trails the industry average.
  • GENTHERM INC's earnings per share declined by 40.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, GENTHERM INC increased its bottom line by earning $2.62 versus $1.96 in the prior year. This year, the market expects earnings to be in line with last year ($2.62 versus $2.62).
  • 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 Auto Components industry and the overall market on the basis of return on equity, GENTHERM INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.

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