Trade-Ideas LLC identified

Advanced Drainage Systems

(

WMS

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

  • WMS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.7 million.
  • WMS has traded 73,867 shares today.
  • WMS is trading at 6.23 times the normal volume for the stock at this time of day.
  • WMS is trading at a new high 3.29% 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.

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More details on WMS:

Advanced Drainage Systems, Inc. designs, manufactures, and markets thermoplastic corrugated pipes and related water management products for non-residential, residential, agriculture, and infrastructure applications in the United States and internationally. The stock currently has a dividend yield of 0.9%. WMS has a PE ratio of 84. Currently there is 1 analyst that rates Advanced Drainage Systems a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Advanced Drainage Systems has been 341,300 shares per day over the past 30 days. Advanced Drainage Systems has a market cap of $1.1 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 2.05 and a short float of 11.4% with 22.27 days to cover. Shares are down 13.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Advanced Drainage Systems as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and poor profit margins.

Highlights from the ratings report include:

  • WMS's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 28.63%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
  • The gross profit margin for ADVANCED DRAINAGE SYSTEMS is rather low; currently it is at 17.04%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -4.82% is significantly below that of the industry average.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Building Products industry average, but is greater than that of the S&P 500. The net income increased by 18.1% when compared to the same quarter one year prior, going from -$12.17 million to -$9.96 million.
  • Even though the current debt-to-equity ratio is 1.21, it is still below the industry average, suggesting that this level of debt is acceptable within the Building Products industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.92 is weak.
  • In comparison to the other companies in the Building Products industry and the overall market, ADVANCED DRAINAGE SYSTEMS's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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