Trade-Ideas LLC identified

Quad/Graphics

(

QUAD

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

  • QUAD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.7 million.
  • QUAD has traded 118,311 shares today.
  • QUAD is trading at 2.12 times the normal volume for the stock at this time of day.
  • QUAD is trading at a new low 4.01% 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 QUAD:

TheStreet Recommends

Quad/Graphics, Inc., together with its subsidiaries, provides print and media solutions in the United States, Europe, and Latin America. The stock currently has a dividend yield of 8.5%.

The average volume for Quad/Graphics has been 245,500 shares per day over the past 30 days. Quad/Graphics has a market cap of $499.3 million and is part of the services sector and diversified services industry. The stock has a beta of 1.54 and a short float of 2.7% with 3.33 days to cover. Shares are down 38.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Quad/Graphics as a

hold

. Among the primary strengths of the company is its generally strong cash flow from operations. At the same time, however, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

Highlights from the ratings report include:

  • Net operating cash flow has increased to $59.20 million or 28.97% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 16.94%.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.2%. Since the same quarter one year prior, revenues slightly dropped by 1.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • QUAD/GRAPHICS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, QUAD/GRAPHICS INC reported lower earnings of $0.36 versus $0.60 in the prior year. This year, the market expects an improvement in earnings ($1.12 versus $0.36).
  • The debt-to-equity ratio of 1.44 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, QUAD maintains a poor quick ratio of 0.87, which illustrates the inability to avoid short-term cash problems.
  • 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 Commercial Services & Supplies industry and the overall market, QUAD/GRAPHICS INC's return on equity significantly trails that of both the industry average and the S&P 500.

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