Trade-Ideas LLC identified

Gentex

(

GNTX

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

  • GNTX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $42.7 million.
  • GNTX has traded 677,020 shares today.
  • GNTX is trading at 6.62 times the normal volume for the stock at this time of day.
  • GNTX is trading at a new low 3.04% 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 GNTX:

Gentex Corporation designs, develops, manufactures, and markets automatic-dimming rearview mirrors and electronics for the automotive industry; dimmable aircraft windows for the aviation industry; and commercial smoke alarms and signaling devices for the fire protection industry worldwide. The stock currently has a dividend yield of 2.2%. GNTX has a PE ratio of 16. Currently there are 5 analysts that rate Gentex a buy, 2 analysts rate it a sell, and 1 rates it a hold.

The average volume for Gentex has been 2.1 million shares per day over the past 30 days. Gentex has a market cap of $4.5 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 1.02 and a short float of 3.9% with 3.88 days to cover. Shares are down 14.5% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Gentex as a

buy

. 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, good cash flow from operations, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 5.3%. Since the same quarter one year prior, revenues rose by 12.1%. 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.
  • GNTX's debt-to-equity ratio is very low at 0.15 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 4.93, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has significantly increased by 89.11% to $83.94 million when compared to the same quarter last year. In addition, GENTEX CORP has also vastly surpassed the industry average cash flow growth rate of -1.15%.
  • GENTEX CORP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, GENTEX CORP increased its bottom line by earning $0.98 versus $0.77 in the prior year. This year, the market expects an improvement in earnings ($1.04 versus $0.98).
  • 43.96% is the gross profit margin for GENTEX CORP which we consider to be strong. Regardless of GNTX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GNTX's net profit margin of 19.65% significantly outperformed against the industry.

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