Trade-Ideas LLC identified

Extreme Networks

(

EXTR

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

  • EXTR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.1 million.
  • EXTR has traded 136,059 shares today.
  • EXTR is trading at 3.02 times the normal volume for the stock at this time of day.
  • EXTR is trading at a new high 5.14% 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 EXTR:

Extreme Networks, Inc., together with its subsidiaries, provides wired and wireless network infrastructure equipment, software, and services for enterprises, data centers, and service providers. Currently there are 2 analysts that rate Extreme Networks a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Extreme Networks has been 1.0 million shares per day over the past 30 days. Extreme has a market cap of $361.9 million and is part of the technology sector and computer hardware industry. The stock has a beta of 0.58 and a short float of 3.8% with 3.63 days to cover. Shares are down 9.3% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Extreme Networks as a

sell

. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally high debt management risk.

Highlights from the ratings report include:

  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Communications Equipment industry and the overall market, EXTREME NETWORKS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • EXTR's debt-to-equity ratio of 0.66 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that EXTR's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.68 is low and demonstrates weak liquidity.
  • EXTR, with its decline in revenue, slightly underperformed the industry average of 4.9%. Since the same quarter one year prior, revenues slightly dropped by 8.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • EXTREME NETWORKS INC has improved earnings per share by 45.0% in the most recent quarter compared to 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, EXTREME NETWORKS INC reported poor results of -$0.73 versus -$0.60 in the prior year. This year, the market expects an improvement in earnings ($0.28 versus -$0.73).
  • The gross profit margin for EXTREME NETWORKS INC is rather high; currently it is at 58.29%. 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 -9.25% is in-line with the industry average.

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