NEW YORK (TheStreet) -- Shares of Quantum (QTM) - Get Report were gaining 5.4% to $1.77, hitting a 52-week high of $1.78, Friday with heavy trading volume after a company director purchased more stock on the open market.

Director Gregg J. Powers purchased 50,000 shares of the data storage devices company for $82,000, or $1.6359 a share, on Dec. 3. The purchase brings Powers' total number of shares in Quantum to 536,500 shares, according to an SEC filing.

More than 3.5 million shares of Quantum were traded by 12:15 p.m. Friday following the disclosure of the sale, well above the average trading volume for the company of about 1.2 million shares a day.

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TST Recommends

TheStreet Ratings team rates QUANTUM CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate QUANTUM CORP (QTM) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The area that we feel has been the company's primary weakness has been its poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 47.53% is the gross profit margin for QUANTUM CORP which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, QTM's net profit margin of 0.92% significantly trails the industry average.
  • Net operating cash flow has significantly increased by 340.95% to $2.28 million when compared to the same quarter last year. In addition, QUANTUM CORP has also vastly surpassed the industry average cash flow growth rate of 35.18%.
  • This stock has increased by 31.96% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in QTM do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
  • QUANTUM CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, QUANTUM CORP continued to lose money by earning -$0.09 versus -$0.22 in the prior year. This year, the market expects an improvement in earnings ($0.09 versus -$0.09).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Computers & Peripherals industry. The net income increased by 115.8% when compared to the same quarter one year prior, rising from -$7.89 million to $1.25 million.
  • You can view the full analysis from the report here: QTM Ratings Report

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