Applied Optoelectronics (AAOI) Is Strong On High Volume Today

Trade-Ideas LLC identified Applied Optoelectronics (AAOI) as a strong on high relative volume candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Applied Optoelectronics

(

AAOI

) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Applied Optoelectronics as such a stock due to the following factors:

  • AAOI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.9 million.
  • AAOI has traded 55,696 shares today.
  • AAOI is trading at 3.14 times the normal volume for the stock at this time of day.
  • AAOI is trading at a new high 7.03% 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 AAOI with the Ticky from Trade-Ideas. See the FREE profile for AAOI NOW at Trade-Ideas

More details on AAOI:

Applied Optoelectronics, Inc. designs and manufactures optical communications products for Internet data center, cable television (CATV), and fiber-to-the-home markets. AAOI has a PE ratio of 31. Currently there are 6 analysts that rate Applied Optoelectronics a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Applied Optoelectronics has been 388,000 shares per day over the past 30 days. Applied Optoelectronics has a market cap of $280.8 million and is part of the technology sector and electronics industry. Shares are up 48.3% year-to-date as of the close of trading on Wednesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Applied Optoelectronics as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:

  • AAOI's very impressive revenue growth greatly exceeded the industry average of 9.1%. Since the same quarter one year prior, revenues leaped by 56.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.43, which illustrates the ability to avoid short-term cash problems.
  • Powered by its strong earnings growth of 60.00% and other important driving factors, this stock has surged by 30.76% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • 35.76% is the gross profit margin for APPLIED OPTOELECTRONICS INC which we consider to be strong. Regardless of AAOI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, AAOI's net profit margin of 4.72% is significantly lower than the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Communications Equipment industry and the overall market, APPLIED OPTOELECTRONICS INC's return on equity is below that of both the industry average and the S&P 500.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

Loading ...