Trade-Ideas LLC identified

Chegg

(

CHGG

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

  • CHGG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.2 million.
  • CHGG has traded 1.2 million shares today.
  • CHGG is trading at 32.83 times the normal volume for the stock at this time of day.
  • CHGG is trading at a new high 15.27% 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 CHGG:

Chegg, Inc. operates student-first connected learning platform that empowers students to take control of their education to save time, save money, and get smarter. Currently there are 8 analysts that rate Chegg a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Chegg has been 440,400 shares per day over the past 30 days. Chegg has a market cap of $470.4 million and is part of the services sector and diversified services industry. Shares are down 48.4% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Chegg as a

sell

. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • Net operating cash flow has significantly decreased to -$18.20 million or 3946.93% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • CHGG has underperformed the S&P 500 Index, declining 17.09% 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 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. Compared to other companies in the Diversified Consumer Services industry and the overall market, CHEGG INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The revenue fell significantly faster than the industry average of 11.8%. Since the same quarter one year prior, revenues fell by 19.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for CHEGG INC is currently very high, coming in at 73.87%. Regardless of CHGG's high profit margin, it has managed to decrease from the same period last year.

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