Globalstar (GSAT) Is Weak On High Volume Today
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.
Trade-Ideas LLC identified
(
) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Globalstar as such a stock due to the following factors:
- GSAT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.7 million.
- GSAT has traded 298,904 shares today.
- GSAT is trading at 2.20 times the normal volume for the stock at this time of day.
- GSAT is trading at a new low 3.10% 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 GSAT with the Ticky from Trade-Ideas. See the FREE profile for GSAT NOW at Trade-Ideas
More details on GSAT:
Globalstar, Inc. provides mobile voice and data communications services through satellite worldwide.
The average volume for Globalstar has been 2.7 million shares per day over the past 30 days. Globalstar has a market cap of $3.0 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 4.29 and a short float of 17.6% with 11.03 days to cover. Shares are up 29.1% year-to-date as of the close of trading on Friday.
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.
Analysis:
rates Globalstar as a
. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk and disappointing return on equity.
Highlights from the ratings report include:
- The debt-to-equity ratio is very high at 7.98 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.28, which clearly demonstrates the inability to cover short-term cash needs.
- 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 Diversified Telecommunication Services industry and the overall market, GLOBALSTAR INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly increased by 67.09% to -$2.89 million when compared to the same quarter last year. In addition, GLOBALSTAR INC has also vastly surpassed the industry average cash flow growth rate of -27.25%.
- This stock has increased by 25.83% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in GSAT do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- GLOBALSTAR INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, GLOBALSTAR INC continued to lose money by earning -$0.58 versus -$0.96 in the prior year. This year, the market expects an improvement in earnings (-$0.10 versus -$0.58).
- You can view the full Globalstar Ratings Report.
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.
null