Trade-Ideas LLC identified

EFuture Information Technology

(

EFUT

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

  • EFUT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.9 million.
  • EFUT has traded 103,015 shares today.
  • EFUT is trading at 20.60 times the normal volume for the stock at this time of day.
  • EFUT is trading at a new low 5.04% 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 EFUT:

eFuture Information Technology Inc. provides software and services to retail and consumer goods industries in the People's Republic of China. The company develops and sells enterprise resource planning software; and provides solutions for distribution, retail, and logistics businesses. EFUT has a PE ratio of 1.

The average volume for EFuture Information Technology has been 71,400 shares per day over the past 30 days. EFuture Information Technology has a market cap of $30.4 million and is part of the technology sector and computer software & services industry. The stock has a beta of 0.09 and a short float of 0.4% with 0.03 days to cover. Shares are up 77.4% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates EFuture Information Technology as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and weak operating cash flow.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 17.3%. Since the same quarter one year prior, revenues slightly increased by 5.7%. 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.
  • EFUT's debt-to-equity ratio is very low at 0.09 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.71 is somewhat weak and could be cause for future problems.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Software industry average. The net income has significantly decreased by 35.2% when compared to the same quarter one year ago, falling from -$0.72 million to -$0.97 million.
  • Net operating cash flow has decreased to -$1.24 million or 35.51% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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