Trade-Ideas LLC identified

Quantum

(

QTM

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

  • QTM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.6 million.
  • QTM has traded 164,769 shares today.
  • QTM is trading at 2.03 times the normal volume for the stock at this time of day.
  • QTM is trading at a new high 3.41% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 QTM:

TST Recommends

Quantum Corporation provides scale-out storage, archive, and data protection solutions for small businesses to major enterprises in the Americas, Europe, and the Asia Pacific. QTM has a PE ratio of 15. Currently there are 4 analysts that rate Quantum a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Quantum has been 1.8 million shares per day over the past 30 days. Quantum has a market cap of $224.3 million and is part of the technology sector and computer hardware industry. The stock has a beta of 1.44 and a short float of 8.5% with 3.56 days to cover. Shares are down 51.7% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Quantum as a

sell

. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and feeble growth in its earnings per share.

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 when compared to that of the S&P 500 and the Computers & Peripherals industry. The net income has significantly decreased by 999.6% when compared to the same quarter one year ago, falling from $1.25 million to -$11.23 million.
  • QUANTUM CORP's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, QUANTUM CORP turned its bottom line around by earning $0.05 versus -$0.09 in the prior year. For the next year, the market is expecting a contraction of 120.0% in earnings (-$0.01 versus $0.05).
  • This stock's share value has moved by only 52.23% over the past year. 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 revenue fell significantly faster than the industry average of 25.4%. Since the same quarter one year prior, revenues fell by 13.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • 41.02% is the gross profit margin for QUANTUM CORP which we consider to be strong. Regardless of QTM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, QTM's net profit margin of -9.59% significantly underperformed when compared to the industry average.

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