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

  • IPHI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $18.7 million.
  • IPHI has traded 113,551 shares today.
  • IPHI is trading at 2.71 times the normal volume for the stock at this time of day.
  • IPHI is trading at a new low 3.19% 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 IPHI: Inphi Corporation provides high-speed analog and mixed signal semiconductor solutions for the communications, datacenter, and computing markets worldwide. Currently there are 11 analysts that rate Inphi a buy, no analysts rate it a sell, and none rate it a hold. The average volume for Inphi has been 857,500 shares per day over the past 30 days. Inphi has a market cap of $1.3 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.06 and a short float of 8.4% with 4.19 days to cover. Shares are up 15.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Inphi as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing. Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 5.9%. Since the same quarter one year prior, revenues rose by 17.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 85.10% and other important driving factors, this stock has surged by 66.40% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • Despite currently having a low debt-to-equity ratio of 0.59, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 10.52 is very high and demonstrates very strong liquidity.
  • The gross profit margin for INPHI CORP is currently very high, coming in at 76.40%. Regardless of IPHI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, IPHI's net profit margin of -4.25% significantly underperformed when compared to the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, INPHI CORP's return on equity significantly trails that of both the industry average and the S&P 500.

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