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 or Stephanie Link.

Trade-Ideas LLC identified

PowerSecure International

(

POWR

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

  • POWR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.8 million.
  • POWR has traded 222,101 shares today.
  • POWR is trading at 10.86 times the normal volume for the stock at this time of day.
  • POWR is trading at a new low 4.13% 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 POWR:

PowerSecure International, Inc. provides products and services to electric utilities and to their commercial, institutional, and industrial customers in the United States. Currently there are 5 analysts that rate PowerSecure International a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for PowerSecure International has been 548,600 shares per day over the past 30 days. PowerSecure International has a market cap of $228.9 million and is part of the services sector and diversified services industry. The stock has a beta of 0.98 and a short float of 16.9% with 7.35 days to cover. Shares are down 40.8% year-to-date as of the close of trading on Monday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates PowerSecure International as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:

  • POWR's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, POWR has a quick ratio of 2.13, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has significantly increased by 217.37% to $7.67 million when compared to the same quarter last year. In addition, POWERSECURE INTL INC has also vastly surpassed the industry average cash flow growth rate of 4.12%.
  • POWR, with its decline in revenue, underperformed when compared the industry average of 6.0%. Since the same quarter one year prior, revenues fell by 18.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Electrical Equipment industry and the overall market, POWERSECURE INTL INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for POWERSECURE INTL INC is currently lower than what is desirable, coming in at 25.11%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -4.81% is significantly below that of the industry average.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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