Trade-Ideas LLC identified

HP

(

HPQ

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

  • HPQ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $123.4 million.
  • HPQ has traded 2.6 million shares today.
  • HPQ is trading at 4.04 times the normal volume for the stock at this time of day.
  • HPQ is trading at a new high 4.02% 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 HPQ:

HP Inc. provides products, technologies, software, solutions, and services to individual consumers and small- and medium-sized businesses (SMBs), as well as to the government, health, and education sectors worldwide. It operates through Personal Systems and Printing segments. The stock currently has a dividend yield of 4.2%. HPQ has a PE ratio of 5. Currently there are 6 analysts that rate HP a buy, 1 analyst rates it a sell, and 10 rate it a hold.

The average volume for HP has been 13.2 million shares per day over the past 30 days. HP has a market cap of $20.7 billion and is part of the technology sector and computer hardware industry. The stock has a beta of 1.58 and a short float of 2.2% with 3.56 days to cover. Shares are up 3% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates HP as a

hold

. The company's strongest point has been its expanding profit margins. At the same time, however, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and weak operating cash flow.

Highlights from the ratings report include:

  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 12.7%. Since the same quarter one year prior, revenues fell by 11.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, HPQ has underperformed the S&P 500 Index, declining 22.86% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • HP INC's earnings per share declined by 12.2% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, HP INC reported lower earnings of $2.16 versus $2.62 in the prior year. For the next year, the market is expecting a contraction of 26.1% in earnings ($1.60 versus $2.16).
  • The gross profit margin for HP INC is rather low; currently it is at 19.24%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 4.83% significantly trails the industry average.
  • Net operating cash flow has significantly decreased to -$108.00 million or 114.51% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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