Trade-Ideas LLC identified

Q2 Holdings

(

QTWO

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Q2 Holdings as such a stock due to the following factors:

  • QTWO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.3 million.
  • QTWO has traded 629,019 shares today.
  • QTWO is trading at 116.26 times the normal volume for the stock at this time of day.
  • QTWO is trading at a new low 4.04% 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 QTWO:

Q2 Holdings, Inc. provides secure cloud-based virtual banking solutions to regional and community financial institutions (RCFIs). Currently there are 4 analysts that rate Q2 Holdings a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Q2 Holdings has been 153,100 shares per day over the past 30 days. Q2 has a market cap of $1.1 billion and is part of the technology sector and computer software & services industry. Shares are up 37.9% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Q2 Holdings as a

sell

. Among the areas we feel are negative, one of the most important has been generally deteriorating net income.

Highlights from the ratings report include:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Internet Software & Services industry average, but is greater than that of the S&P 500. The net income has decreased by 6.4% when compared to the same quarter one year ago, dropping from -$4.68 million to -$4.98 million.
  • Compared to other companies in the Internet Software & Services industry and the overall market, Q2 HOLDINGS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for Q2 HOLDINGS INC is rather high; currently it is at 51.36%. 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 -18.95% is in-line with the industry average.
  • Net operating cash flow has significantly increased by 674.73% to $2.98 million when compared to the same quarter last year. In addition, Q2 HOLDINGS INC has also vastly surpassed the industry average cash flow growth rate of 19.52%.
  • QTWO's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.88, which clearly demonstrates the ability to cover short-term cash needs.

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