Trade-Ideas LLC identified

Stamps.com

(

STMP

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

  • STMP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $117.7 million.
  • STMP has traded 599,631 shares today.
  • STMP is trading at 18.75 times the normal volume for the stock at this time of day.
  • STMP is trading at a new low 4.01% 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 STMP:

Stamps.com Inc. provides Internet-based postage solutions in the United States. STMP has a PE ratio of 142. Currently there are 3 analysts that rate Stamps.com a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Stamps.com has been 935,900 shares per day over the past 30 days. Stamps.com has a market cap of $1.4 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 0.04 and a short float of 22% with 2.19 days to cover. Shares are down 26.2% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Stamps.com as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, good cash flow from operations, expanding profit margins and growth in earnings per share. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • STMP's very impressive revenue growth greatly exceeded the industry average of 20.5%. Since the same quarter one year prior, revenues leaped by 85.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 1464.7% when compared to the same quarter one year prior, rising from -$0.97 million to $13.24 million.
  • Net operating cash flow has significantly increased by 173.52% to $46.77 million when compared to the same quarter last year. In addition, STAMPS.COM INC has also vastly surpassed the industry average cash flow growth rate of 19.28%.
  • The gross profit margin for STAMPS.COM INC is currently very high, coming in at 83.52%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 16.17% trails the industry average.
  • Despite currently having a low debt-to-equity ratio of 0.49, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that STMP's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.23 is high and demonstrates strong liquidity.

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