Trade-Ideas LLC identified

Paylocity

(

PCTY

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

  • PCTY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $18.9 million.
  • PCTY has traded 52,529 shares today.
  • PCTY is trading at 4.02 times the normal volume for the stock at this time of day.
  • PCTY is trading at a new high 4.15% 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 PCTY:

Paylocity Holding Corporation provides cloud-based payroll and human capital management (HCM) software solutions for medium-sized organizations in the United States. Currently there are 8 analysts that rate Paylocity a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Paylocity has been 330,800 shares per day over the past 30 days. Paylocity has a market cap of $1.9 billion and is part of the technology sector and computer software & services industry. Shares are down 18% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Paylocity as a

sell

. The area that we feel has been the company's primary weakness has been its disappointing return on equity.

Highlights from the ratings report include:

  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Software industry and the overall market, PAYLOCITY HOLDING CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • PAYLOCITY HOLDING CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. 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, PAYLOCITY HOLDING CORP reported poor results of -$0.29 versus -$0.11 in the prior year. This year, the market expects an improvement in earnings ($0.19 versus -$0.29).
  • PCTY 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. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.09 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • The gross profit margin for PAYLOCITY HOLDING CORP is rather high; currently it is at 61.43%. 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 -2.13% is in-line with the industry average.
  • Net operating cash flow has significantly increased by 646.99% to $7.84 million when compared to the same quarter last year. In addition, PAYLOCITY HOLDING CORP has also vastly surpassed the industry average cash flow growth rate of 30.90%.

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