Trade-Ideas LLC identified

Qualcomm

(

QCOM

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

  • QCOM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $617.3 million.
  • QCOM has traded 5.9 million shares today.
  • QCOM is trading at 3.45 times the normal volume for the stock at this time of day.
  • QCOM is trading at a new low 7.01% 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 QCOM:

TheStreet Recommends

QUALCOMM Incorporated develops, designs, manufactures, and markets digital communications products and services in China, South Korea, Taiwan, the United States, and internationally. The stock currently has a dividend yield of 4%. QCOM has a PE ratio of 15. Currently there are 15 analysts that rate Qualcomm a buy, 1 analyst rates it a sell, and 10 rate it a hold.

The average volume for Qualcomm has been 15.8 million shares per day over the past 30 days. Qualcomm has a market cap of $72.5 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 1.45 and a short float of 0.9% with 1.22 days to cover. Shares are down 2.9% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Qualcomm as a

hold

. The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • The gross profit margin for QUALCOMM INC is rather high; currently it is at 64.70%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 19.46% is above that of the industry average.
  • Net operating cash flow has slightly increased to $1,684.00 million or 4.01% when compared to the same quarter last year. Despite an increase in cash flow, QUALCOMM INC's average is still marginally south of the industry average growth rate of 8.91%.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 34.28%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 39.63% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Communications Equipment industry. The net income has significantly decreased by 43.9% when compared to the same quarter one year ago, falling from $1,894.00 million to $1,062.00 million.

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