Trade-Ideas LLC identified

SPS Commerce

(

SPSC

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

  • SPSC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.1 million.
  • SPSC has traded 100,553 shares today.
  • SPSC is trading at 2.43 times the normal volume for the stock at this time of day.
  • SPSC is trading at a new high 3.29% 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 SPSC:

SPS Commerce, Inc. provides cloud-based supply chain management solutions worldwide. It provides solutions through the SPS Commerce platform, a cloud-based product suite that enhances the way suppliers, retailers, distributors, and other customers manage and fulfill orders. SPSC has a PE ratio of 156. Currently there are 6 analysts that rate SPS Commerce a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for SPS Commerce has been 182,600 shares per day over the past 30 days. SPS has a market cap of $660.9 million and is part of the technology sector and computer software & services industry. The stock has a beta of 1.56 and a short float of 4.8% with 3.14 days to cover. Shares are down 44.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates SPS Commerce as a

hold

. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and robust revenue growth. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:

  • SPS COMMERCE INC 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 two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, SPS COMMERCE INC increased its bottom line by earning $0.26 versus $0.16 in the prior year. This year, the market expects an improvement in earnings ($0.94 versus $0.26).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 149.6% when compared to the same quarter one year prior, rising from $0.85 million to $2.13 million.
  • The gross profit margin for SPS COMMERCE INC is currently very high, coming in at 71.98%. Regardless of SPSC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SPSC's net profit margin of 5.03% is significantly lower than the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, SPS COMMERCE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • SPSC's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 42.86%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, SPSC is still more expensive than most of the other companies in its industry.

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