Trade-Ideas LLC identified

InvenSense

(

INVN

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

  • INVN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $10.7 million.
  • INVN has traded 190,586 shares today.
  • INVN is trading at 2.34 times the normal volume for the stock at this time of day.
  • INVN is trading at a new low 3.00% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in INVN with the Ticky from Trade-Ideas. See the FREE profile for INVN NOW at Trade-Ideas

More details on INVN:

InvenSense, Inc. designs, develops, markets, and sells micro-electro-mechanical system (MEMS) gyroscopes for motion tracking devices in consumer electronics. Currently there are 4 analysts that rate InvenSense a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for InvenSense has been 2.1 million shares per day over the past 30 days. InvenSense has a market cap of $932.7 million and is part of the technology sector and electronics industry. The stock has a beta of 1.81 and a short float of 22.6% with 16.38 days to cover. Shares are down 38.5% year-to-date as of the close of trading on Thursday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates InvenSense as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • INVN's very impressive revenue growth greatly exceeded the industry average of 6.4%. Since the same quarter one year prior, revenues leaped by 59.4%. 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.
  • The current debt-to-equity ratio, 0.40, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 4.38, which clearly demonstrates the ability to cover short-term cash needs.
  • 47.06% is the gross profit margin for INVENSENSE INC which we consider to be strong. Regardless of INVN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, INVN's net profit margin of -5.50% significantly underperformed when compared to the industry average.
  • Looking at the price performance of INVN's shares over the past 12 months, there is not much good news to report: the stock is down 56.91%, 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. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Electronic Equipment, Instruments & Components industry average. The net income has decreased by 21.0% when compared to the same quarter one year ago, dropping from -$4.83 million to -$5.85 million.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.