Trade-Ideas LLC identified

Mitek Systems

(

MITK

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

  • MITK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.4 million.
  • MITK has traded 202,099 shares today.
  • MITK is trading at 8.23 times the normal volume for the stock at this time of day.
  • MITK is trading at a new low 5.05% 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 MITK:

Mitek Systems, Inc. develops, sells, and services software solutions related to mobile imaging in the Unites States. MITK has a PE ratio of 79. Currently there is 1 analyst that rates Mitek Systems a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Mitek Systems has been 214,500 shares per day over the past 30 days. Mitek Systems has a market cap of $122.4 million and is part of the technology sector and computer software & services industry. The stock has a beta of 0.61 and a short float of 9.1% with 3.08 days to cover. Shares are up 31.7% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Mitek Systems as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. 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 greatly exceeded the industry average of 17.3%. Since the same quarter one year prior, revenues rose by 38.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • MITEK SYSTEMS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, MITEK SYSTEMS INC continued to lose money by earning -$0.17 versus -$0.27 in the prior year. This year, the market expects an improvement in earnings ($0.16 versus -$0.17).
  • The gross profit margin for MITEK SYSTEMS INC is currently very high, coming in at 92.84%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 14.23% trails the industry average.
  • Powered by its strong earnings growth of 160.00% and other important driving factors, this stock has surged by 32.81% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Software industry and the overall market, MITEK SYSTEMS INC's return on equity is below that of both the industry average and the S&P 500.

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