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 $6.4 million.
  • QUAD has traded 96,312 shares today.
  • QUAD is trading at 5.85 times the normal volume for the stock at this time of day.
  • QUAD is trading at a new low 3.02% 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:

Quad/Graphics, Inc., together with its subsidiaries, provides print and media solutions in the United States, Europe, Latin America, and internationally. The company operates in two segments, United States Print and Related Services; and International. The stock currently has a dividend yield of 6%.

The average volume for Quad/Graphics has been 302,700 shares per day over the past 30 days. Quad/Graphics has a market cap of $992.0 million and is part of the services sector and diversified services industry. The stock has a beta of 1.35 and a short float of 4.3% with 3.83 days to cover. Shares are up 120.4% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Quad/Graphics as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:

  • The debt-to-equity ratio is very high at 3.07 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, QUAD maintains a poor quick ratio of 0.78, which illustrates the inability to avoid short-term cash problems.
  • 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 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.
  • The gross profit margin for QUAD/GRAPHICS INC is rather low; currently it is at 22.93%. Regardless of QUAD's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 0.36% trails the industry average.
  • After a year of stock price fluctuations, the net result is that QUAD's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. 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.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Commercial Services & Supplies industry average, but is greater than that of the S&P 500. The net income increased by 110.8% when compared to the same quarter one year prior, rising from -$35.20 million to $3.80 million.

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