Trade-Ideas LLC identified

Sigma Designs

(

SIGM

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

  • SIGM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.8 million.
  • SIGM has traded 75,781 shares today.
  • SIGM is trading at 3.40 times the normal volume for the stock at this time of day.
  • SIGM is trading at a new low 3.05% 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 SIGM:

Sigma Designs, Inc., an integrated semiconductor solutions provider, provides intelligent media platforms for use in the home entertainment and home control markets. Currently there are 7 analysts that rate Sigma Designs a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Sigma Designs has been 646,200 shares per day over the past 30 days. Sigma Designs has a market cap of $341.3 million and is part of the technology sector and electronics industry. The stock has a beta of 1.34 and a short float of 4.1% with 2.42 days to cover. Shares are up 15.3% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Sigma Designs as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 10.8%. Since the same quarter one year prior, revenues rose by 36.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SIGM has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, SIGM has a quick ratio of 2.34, which demonstrates the ability of the company to cover short-term liquidity needs.
  • SIGMA DESIGNS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SIGMA DESIGNS INC reported poor results of -$0.63 versus -$0.32 in the prior year. This year, the market expects an improvement in earnings ($0.36 versus -$0.63).
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, SIGMA DESIGNS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$3.36 million or 241.49% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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