Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified

magicJack VocalTec

(

CALL

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

  • CALL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.6 million.
  • CALL has traded 177,137 shares today.
  • CALL is trading at 16.83 times the normal volume for the stock at this time of day.
  • CALL is trading at a new low 11.06% 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 CALL:

magicJack VocalTec Ltd., together with its subsidiaries, operates as a cloud-based communications company that provides voice-over-Internet-Protocol (VoIP) services in the United States. CALL has a PE ratio of 2.9. Currently there are no analysts that rate magicJack VocalTec a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for magicJack VocalTec has been 431,800 shares per day over the past 30 days. magicJack VocalTec has a market cap of $175.6 million and is part of the technology sector and telecommunications industry. The stock has a beta of 2.48 and a short float of 26.2% with 12.73 days to cover. Shares are down 17.3% year-to-date as of the close of trading on Monday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates magicJack VocalTec as a

hold

. The company's strengths can be seen in multiple areas, such as its notable return on equity, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. 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:

  • Compared to other companies in the Diversified Telecommunication Services industry and the overall market, MAGICJACK VOCALTEC LTD's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for MAGICJACK VOCALTEC LTD is rather high; currently it is at 66.24%. Regardless of CALL's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 7.69% trails the industry average.
  • The share price of MAGICJACK VOCALTEC LTD has not done very well: it is down 19.89% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Diversified Telecommunication Services industry. The net income has significantly decreased by 65.1% when compared to the same quarter one year ago, falling from $6.51 million to $2.27 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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