Trade-Ideas LLC identified

Ocean Power Technologies

(

OPTT

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

  • OPTT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $23.5 million.
  • OPTT has traded 122,744 shares today.
  • OPTT is trading at 6.42 times the normal volume for the stock at this time of day.
  • OPTT is trading at a new low 8.14% 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 OPTT:

Ocean Power Technologies, Inc. develops and commercializes proprietary systems that generate electricity by harnessing the renewable energy of ocean waves primarily in the United States, Europe, Asia, and Australia.

The average volume for Ocean Power Technologies has been 1.1 million shares per day over the past 30 days. Ocean has a market cap of $16.1 million and is part of the industrial goods sector and industrial industry. The stock has a beta of 2.75 and a short float of 6% with 0.04 days to cover. Shares are up 204.3% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Ocean Power Technologies as a

sell

. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • 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. Compared to other companies in the Electrical Equipment industry and the overall market, OCEAN POWER TECHNOLOGIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • OPTT has underperformed the S&P 500 Index, declining 21.82% from its price level of one year ago. 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.
  • OPTT, with its very weak revenue results, has greatly underperformed against the industry average of 12.1%. Since the same quarter one year prior, revenues plummeted by 98.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Net operating cash flow has significantly increased by 58.68% to -$1.09 million when compared to the same quarter last year. Despite an increase in cash flow, OCEAN POWER TECHNOLOGIES INC's cash flow growth rate is still lower than the industry average growth rate of 80.62%.
  • OCEAN POWER TECHNOLOGIES INC has improved earnings per share by 12.5% 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 year. During the past fiscal year, OCEAN POWER TECHNOLOGIES INC continued to lose money by earning -$7.50 versus -$9.40 in the prior year.

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