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

DigitalGlobe

(

DGI

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified DigitalGlobe as such a stock due to the following factors:

  • DGI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $17.2 million.
  • DGI has traded 87,062 shares today.
  • DGI is up 4.8% today.
  • DGI was down 14.5% yesterday.

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More details on DGI:

DigitalGlobe, Inc. provides imagery and imagery information products and services in the United States and internationally. DGI has a PE ratio of 225. Currently there are 7 analysts that rate DigitalGlobe a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for DigitalGlobe has been 473,100 shares per day over the past 30 days. DigitalGlobe has a market cap of $1.8 billion and is part of the industrial goods sector and aerospace/defense industry. The stock has a beta of 1.42 and a short float of 10.8% with 7.05 days to cover. Shares are down 31.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates DigitalGlobe as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and unimpressive growth in net income.

Highlights from the ratings report include:

  • DGI's revenue growth has slightly outpaced the industry average of 4.3%. Since the same quarter one year prior, revenues slightly increased by 8.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.86, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, DGI has a quick ratio of 1.60, which demonstrates the ability of the company to cover short-term liquidity needs.
  • DIGITALGLOBE INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, DIGITALGLOBE INC turned its bottom line around by earning $0.18 versus -$1.12 in the prior year. This year, the market expects an improvement in earnings ($0.24 versus $0.18).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Aerospace & Defense industry. The net income has significantly decreased by 1325.0% when compared to the same quarter one year ago, falling from $0.40 million to -$4.90 million.
  • The share price of DIGITALGLOBE INC has not done very well: it is down 7.96% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

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