Trade-Ideas LLC identified

Splunk

(

SPLK

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

  • SPLK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $88.4 million.
  • SPLK has traded 211,536 shares today.
  • SPLK is trading at 2.18 times the normal volume for the stock at this time of day.
  • SPLK 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.

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More details on SPLK:

Splunk, Inc. provides software products that enable organizations to gain real-time operational intelligence in the United States and internationally. The company's products enable users to collect, index, search, explore, monitor, and analyze data regardless of format or source users. Currently there are 23 analysts that rate Splunk a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Splunk has been 1.6 million shares per day over the past 30 days. Splunk has a market cap of $7.5 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 2.50 and a short float of 10.2% with 6.62 days to cover. Shares are down 1.9% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Splunk as a

sell

. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity.

Highlights from the ratings report include:

  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Software industry and the overall market, SPLUNK INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for SPLUNK INC is currently very high, coming in at 85.87%. Regardless of SPLK's high profit margin, it has managed to decrease from the same period last year.
  • After a year of stock price fluctuations, the net result is that SPLK's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • SPLUNK INC has improved earnings per share by 13.7% 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, SPLUNK INC reported poor results of -$1.81 versus -$0.75 in the prior year. This year, the market expects an improvement in earnings ($0.13 versus -$1.81).
  • 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 9.0% when compared to the same quarter one year prior, going from -$60.78 million to -$55.29 million.

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