Splunk (SPLK) Shows Signs Of Being Water-Logged And Getting Wetter
Trade-Ideas LLC identified
(
) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Splunk as such a stock due to the following factors:
- SPLK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $109.8 million.
- SPLK has traded 3.4 million shares today.
- SPLK traded in a range 233.7% of the normal price range with a price range of $5.38.
- SPLK traded below its daily resistance level (quality: 1 day, meaning that the stock is crossing a resistance level set by the last 1 calendar day. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.
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More details on SPLK:
Splunk, Inc. provides software products that enable organizations to gain real-time operational intelligence in the United States and internationally. The company's products enable users to collect, index, search, explore, monitor, and analyze data regardless of format or source users. Currently there are 22 analysts that rate Splunk a buy, no analysts rate it a sell, and 4 rate it a hold.
The average volume for Splunk has been 1.8 million shares per day over the past 30 days. Splunk has a market cap of $8.0 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.93 and a short float of 13.8% with 7.46 days to cover. Shares are up 6.5% year-to-date as of the close of trading on Thursday.
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Analysis:
rates Splunk as a
. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Software industry and the overall market, SPLUNK INC's return on equity significantly trails that of both the industry average and the S&P 500.
- SPLK has underperformed the S&P 500 Index, declining 13.51% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The gross profit margin for SPLUNK INC is currently very high, coming in at 85.87%. Regardless of SPLK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SPLK's net profit margin of -37.27% significantly underperformed when compared to the industry average.
- SPLUNK INC has improved earnings per share by 13.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SPLUNK INC reported poor results of -$1.81 versus -$0.75 in the prior year. This year, the market expects an improvement in earnings ($0.13 versus -$1.81).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 9.0% when compared to the same quarter one year prior, going from -$60.78 million to -$55.29 million.
- You can view the full Splunk Ratings Report.
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