Trade-Ideas LLC identified

Apollo Investment

(

AINV

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

  • AINV has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.0 million.
  • AINV has traded 552,569 shares today.
  • AINV is trading at 3.13 times the normal volume for the stock at this time of day.
  • AINV is trading at a new low 3.18% 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.

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More details on AINV:

Apollo Investment Corporation is business development company and operates as a closed-end management investment company. The company invests in middle market companies. It provides direct equity capital, mezzanine and senior secured loans, and subordinated debt and loans. The stock currently has a dividend yield of 14.1%. Currently there are 5 analysts that rate Apollo Investment a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Apollo Investment has been 968,700 shares per day over the past 30 days. Apollo Investment has a market cap of $1.3 billion and is part of the financial sector and financial services industry. Shares are up 2.5% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Apollo Investment as a

hold

. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, deteriorating net income and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • Net operating cash flow has increased to $55.91 million or 14.32% when compared to the same quarter last year. In addition, APOLLO INVESTMENT CORP has also vastly surpassed the industry average cash flow growth rate of -184.85%.
  • The gross profit margin for APOLLO INVESTMENT CORP is currently very high, coming in at 71.48%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -27.32% is in-line with the industry average.
  • Despite the weak revenue results, AINV has outperformed against the industry average of 24.4%. Since the same quarter one year prior, revenues fell by 14.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Looking at the price performance of AINV's shares over the past 12 months, there is not much good news to report: the stock is down 25.98%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • 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 Capital Markets industry and the overall market, APOLLO INVESTMENT CORP's return on equity significantly trails that of both the industry average and the S&P 500.

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