Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified

Rally Software Development

(

RALY

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

  • RALY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.9 million.
  • RALY has traded 56,982 shares today.
  • RALY is trading at 4.04 times the normal volume for the stock at this time of day.
  • RALY is trading at a new high 3.04% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in RALY with the Ticky from Trade-Ideas. See the FREE profile for RALY NOW at Trade-Ideas

More details on RALY:

Rally Software Development Corp. provides cloud based solutions for managing Agile software development activities worldwide. Currently there is 1 analyst that rates Rally Software Development a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Rally Software Development has been 370,000 shares per day over the past 30 days. Rally Software Development has a market cap of $310.2 million and is part of the technology sector and computer software & services industry. Shares are down 34.1% year-to-date as of the close of trading on Thursday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Rally Software Development as a

sell

. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • RALLY SOFTWARE DEV CORP 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. For the next year, the market is expecting a contraction of 45.8% in earnings (-$1.23 versus -$0.84).
  • 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 Software industry. The net income has significantly decreased by 290.9% when compared to the same quarter one year ago, falling from -$2.28 million to -$8.91 million.
  • Net operating cash flow has significantly decreased to -$8.92 million or 174.07% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 62.65%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 300.00% 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 gross profit margin for RALLY SOFTWARE DEV CORP is currently very high, coming in at 76.69%. Regardless of RALY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, RALY's net profit margin of -41.40% significantly underperformed when compared to the industry average.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

null