Trade-Ideas LLC identified

DigitalGlobe

(

DGI

) as a weak on high relative volume 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 $7.7 million.
  • DGI has traded 200,509 shares today.
  • DGI is trading at 11.68 times the normal volume for the stock at this time of day.
  • DGI is trading at a new low 11.01% 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 DGI:

DigitalGlobe, Inc. provides imagery and imagery information products and services in the United States and internationally. DGI has a PE ratio of 52. Currently there are 5 analysts that rate DigitalGlobe a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for DigitalGlobe has been 698,300 shares per day over the past 30 days. DigitalGlobe has a market cap of $1.0 billion and is part of the industrial goods sector and aerospace/defense industry. The stock has a beta of 0.68 and a short float of 7.8% with 7.75 days to cover. Shares are down 4.3% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates DigitalGlobe as a

sell

. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • This stock's share value has moved by only 52.13% over the past year. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, DGI is still more expensive than most of the other companies in its industry.
  • 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 Aerospace & Defense industry and the overall market, DIGITALGLOBE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for DIGITALGLOBE INC is currently very high, coming in at 80.21%. 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 5.53% trails the industry average.
  • Net operating cash flow has significantly increased by 80.59% to $85.60 million when compared to the same quarter last year. In addition, DIGITALGLOBE INC has also vastly surpassed the industry average cash flow growth rate of 6.58%.
  • The debt-to-equity ratio is somewhat low, currently at 0.89, 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 1.66, which demonstrates the ability of the company to cover short-term liquidity needs.

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