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 $5.6 million.
  • MITK has traded 203,753 shares today.
  • MITK is trading at 5.71 times the normal volume for the stock at this time of day.
  • MITK is trading at a new low 3.21% 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, markets, and sells mobile capture and identity verification software solutions for enterprise customers in the Unites States. MITK has a PE ratio of 109. Currently there are 5 analysts that rate Mitek Systems a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Mitek Systems has been 889,300 shares per day over the past 30 days. Mitek Systems has a market cap of $246.1 million and is part of the technology sector and computer software & services industry. The stock has a beta of 0.57 and a short float of 8% with 3.18 days to cover. Shares are up 89.3% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Mitek Systems as a

buy

. 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, good cash flow from operations, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:

  • MITK's very impressive revenue growth greatly exceeded the industry average of 0.6%. Since the same quarter one year prior, revenues leaped by 50.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • MITK has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.99, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has significantly increased by 159.39% to $4.17 million when compared to the same quarter last year. In addition, MITEK SYSTEMS INC has also vastly surpassed the industry average cash flow growth rate of 22.19%.
  • MITEK SYSTEMS INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MITEK SYSTEMS INC turned its bottom line around by earning $0.08 versus -$0.17 in the prior year. This year, the market expects an improvement in earnings ($0.23 versus $0.08).
  • 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. Despite the strong results of the gross profit margin, MITK's net profit margin of 6.83% significantly trails the industry average.

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