Trade-Ideas LLC identified

Monotype Imaging Holdings

(

TYPE

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

  • TYPE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.7 million.
  • TYPE has traded 112,087 shares today.
  • TYPE is trading at 20.45 times the normal volume for the stock at this time of day.
  • TYPE is trading at a new high 11.09% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 TYPE:

Monotype Imaging Holdings Inc. develops, markets, and licenses technologies and fonts in the United States, the United Kingdom, Germany, Japan, and rest of Asia. The stock currently has a dividend yield of 1.8%. TYPE has a PE ratio of 31. Currently there are 2 analysts that rate Monotype Imaging Holdings a buy, 1 analyst rates it a sell, and none rate it a hold.

The average volume for Monotype Imaging Holdings has been 168,300 shares per day over the past 30 days. Monotype Imaging has a market cap of $880.1 million and is part of the technology sector and computer software & services industry. The stock has a beta of 0.86 and a short float of 2.2% with 5.28 days to cover. Shares are down 20.2% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Monotype Imaging Holdings as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 18.9%. Since the same quarter one year prior, revenues slightly increased by 3.2%. 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.
  • TYPE 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 3.20, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for MONOTYPE IMAGING HOLDINGS is currently very high, coming in at 85.60%. 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 12.72% trails the industry average.
  • Net operating cash flow has remained constant at $13.44 million with no significant change when compared to the same quarter last year. Along with maintaining stable cash flow from operations, the firm exceeded the industry average cash flow growth rate of -12.64%.

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