Trade-Ideas: International Business Machines (IBM) Is Today's Strong On High Relative Volume Stock
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.Trade-Ideas LLC identified International Business Machines (IBM) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified International Business Machines as such a stock due to the following factors:
- IBM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $827.6 million.
- IBM has traded 1.2 million shares today.
- IBM is trading at 5.70 times the normal volume for the stock at this time of day.
- IBM is trading at a new high 3.00% 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.EXCLUSIVE OFFER: Get the inside scoop on opportunities in IBM with the Ticky from Trade-Ideas. See the FREE profile for IBM NOW at Trade-IdeasMore details on IBM: International Business Machines Corporation provides information technology (IT) products and services worldwide. The company operates in five segments: Global Technology Services, Global Business Services, Software, Systems and Technology, and Global Financing. The stock currently has a dividend yield of 2%. IBM has a PE ratio of 13.4. Currently there are 10 analysts that rate International Business Machines a buy, no analysts rate it a sell, and 11 rate it a hold.The average volume for International Business Machines has been 4.2 million shares per day over the past 30 days. International Business Machines has a market cap of $214.9 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 0.73 and a short float of 1.6% with 4.31 days to cover. Shares are up 1.6% year to date as of the close of trading on Wednesday.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.TheStreetRatings.com Analysis:TheStreet Quant Ratings rates International Business Machines as a buy. The company's strengths can be seen in multiple areas, such as its notable return on equity, growth in earnings per share, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.Highlights from the ratings report include:
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the IT Services industry and the overall market, INTL BUSINESS MACHINES CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- INTL BUSINESS MACHINES CORP's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, INTL BUSINESS MACHINES CORP increased its bottom line by earning $14.41 versus $13.12 in the prior year. This year, the market expects an improvement in earnings ($16.70 versus $14.41).
- The gross profit margin for INTL BUSINESS MACHINES CORP is rather high; currently it is at 51.18%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 12.95% trails the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 13.4%. Since the same quarter one year prior, revenues slightly dropped by 5.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- In its most recent trading session, IBM has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
- You can view the full International Business Machines Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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