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Trade-Ideas: SanDisk (SNDK) Is Today's Weak 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 SanDisk ( SNDK) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified SanDisk as such a stock due to the following factors:

  • SNDK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $346.2 million.
  • SNDK has traded 341,925 shares today.
  • SNDK is trading at 3.29 times the normal volume for the stock at this time of day.
  • SNDK is trading at a new low 3.02% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in SNDK with the Ticky from Trade-Ideas. See the FREE profile for SNDK NOW at Trade-Ideas

More details on SNDK:

Sandisk Corporation designs, develops, manufactures, and markets flash storage card products that are used in various consumer electronics products. SNDK has a PE ratio of 20.8. Currently there are 16 analysts that rate SanDisk a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for SanDisk has been 4.0 million shares per day over the past 30 days. SanDisk has a market cap of $14.8 billion and is part of the technology sector and computer hardware industry. The stock has a beta of 1.62 and a short float of 3.1% with 1.19 days to cover. Shares are up 39.2% year to date as of the close of trading on Thursday.

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 SanDisk 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, increase in net income, good cash flow from operations and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 10.2%. Since the same quarter one year prior, revenues rose by 43.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Although SNDK's debt-to-equity ratio of 0.11 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 2.91, which clearly demonstrates the ability to cover short-term cash needs.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Computers & Peripherals industry. The net income increased by 1918.6% when compared to the same quarter one year prior, rising from $12.97 million to $261.79 million.
  • Net operating cash flow has significantly increased by 1944.43% to $390.79 million when compared to the same quarter last year. In addition, SANDISK CORP has also vastly surpassed the industry average cash flow growth rate of -11.31%.
  • The gross profit margin for SANDISK CORP is rather high; currently it is at 50.25%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 17.73% trails the industry average.

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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