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

  • FARO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.6 million.
  • FARO has traded 78,266 shares today.
  • FARO is trading at 23.18 times the normal volume for the stock at this time of day.
  • FARO is trading at a new high 21.11% 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 FARO: FARO Technologies, Inc. FARO has a PE ratio of 39. Currently there are 2 analysts that rate Faro Technologies a buy, no analysts rate it a sell, and 4 rate it a hold. The average volume for Faro Technologies has been 134,800 shares per day over the past 30 days. Faro has a market cap of $484.6 million and is part of the technology sector and electronics industry. The stock has a beta of 1.48 and a short float of 6.7% with 8.04 days to cover. Shares are down 4.9% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Faro Technologies as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and deteriorating net income. Highlights from the ratings report include:

  • FARO's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.49, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has significantly increased by 1605.41% to $20.14 million when compared to the same quarter last year. In addition, FARO TECHNOLOGIES INC has also vastly surpassed the industry average cash flow growth rate of -26.48%.
  • The gross profit margin for FARO TECHNOLOGIES INC is rather high; currently it is at 53.27%. Regardless of FARO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, FARO's net profit margin of 9.72% compares favorably to the industry average.
  • Looking at the price performance of FARO's shares over the past 12 months, there is not much good news to report: the stock is down 31.58%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. 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, FARO is still more expensive than most of the other companies in its industry.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, FARO TECHNOLOGIES INC's return on equity is below that of both the industry average and the S&P 500.

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