Rovi (ROVI) Weak On High Volume Today - TheStreet

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.

Trade-Ideas LLC identified

Rovi

(

ROVI

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

  • ROVI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $53.0 million.
  • ROVI has traded 175,662 shares today.
  • ROVI is trading at 2.85 times the normal volume for the stock at this time of day.
  • ROVI is trading at a new low 3.04% 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 ROVI:

Rovi Corporation provides integrated solutions for the discovery and personalization of digital entertainment to service providers and consumer electronics (CE) industry worldwide. Currently there are 4 analysts that rate Rovi a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Rovi has been 1.3 million shares per day over the past 30 days. Rovi has a market cap of $1.7 billion and is part of the technology sector and computer software & services industry. Shares are down 17.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Rovi as a

hold

. The company's strengths can be seen in multiple areas, such as its compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 90.5% when compared to the same quarter one year prior, rising from -$60.81 million to -$5.81 million.
  • ROVI, with its decline in revenue, underperformed when compared the industry average of 9.9%. Since the same quarter one year prior, revenues fell by 11.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Software industry and the overall market, ROVI CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $39.51 million or 43.93% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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