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.

Trade-Ideas LLC identified

NCR

(

NCR

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

  • NCR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $103.1 million.
  • NCR has traded 1.2 million shares today.
  • NCR is trading at 14.41 times the normal volume for the stock at this time of day.
  • NCR is trading at a new low 10.03% 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 NCR:

NCR Corporation, a technology company, provides solutions and services that enable businesses to connect, interact, and transact with their customers worldwide. The company operates through four segments: Financial Services, Retail Solutions, Hospitality, and Emerging Industries. NCR has a PE ratio of 3. Currently there are 2 analysts that rate NCR a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for NCR has been 2.3 million shares per day over the past 30 days. NCR has a market cap of $5.0 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.27 and a short float of 2.6% with 1.08 days to cover. Shares are up 4.3% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates NCR as a

buy

. Among the primary strengths of the company is its generally strong cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • Net operating cash flow has significantly increased by 400.00% to $75.00 million when compared to the same quarter last year. In addition, NCR CORP has also vastly surpassed the industry average cash flow growth rate of 50.58%.
  • NCR CORP's earnings per share declined by 25.8% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, NCR CORP reported lower earnings of $1.06 versus $2.67 in the prior year. This year, the market expects an improvement in earnings ($2.65 versus $1.06).
  • The revenue fell significantly faster than the industry average of 35.9%. Since the same quarter one year prior, revenues slightly dropped by 2.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Currently the debt-to-equity ratio of 1.91 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, NCR maintains a poor quick ratio of 0.93, which illustrates the inability to avoid short-term cash problems.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. In comparison to the other companies in the Computers & Peripherals industry and the overall market, NCR CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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