Trade-Ideas LLC identified

Advanced Drainage Systems

(

WMS

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

  • WMS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.3 million.
  • WMS has traded 66,531 shares today.
  • WMS is trading at 4.38 times the normal volume for the stock at this time of day.
  • WMS is trading at a new high 3.01% 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 WMS:

Advanced Drainage Systems, Inc. designs, manufactures, and markets thermoplastic corrugated pipes and related water management products for non-residential, residential, agriculture, and infrastructure applications in the United States and internationally. The stock currently has a dividend yield of 0.8%. Currently there are 2 analysts that rate Advanced Drainage Systems a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Advanced Drainage Systems has been 414,500 shares per day over the past 30 days. Advanced Drainage Systems has a market cap of $1.3 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 2.05 and a short float of 16.9% with 16.99 days to cover. Shares are down 2.6% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Advanced Drainage Systems as a

sell

. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and poor profit margins.

Highlights from the ratings report include:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Building Products industry. The net income has significantly decreased by 88.5% when compared to the same quarter one year ago, falling from -$14.67 million to -$27.64 million.
  • The gross profit margin for ADVANCED DRAINAGE SYSTEMS is currently extremely low, coming in at 10.46%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -13.23% is significantly below that of the industry average.
  • Despite the current debt-to-equity ratio of 1.55, it is still below the industry average, suggesting that this level of debt is acceptable within the Building Products industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.80 is weak.
  • In comparison to the other companies in the Building Products industry and the overall market, ADVANCED DRAINAGE SYSTEMS's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The share price of ADVANCED DRAINAGE SYSTEMS has not done very well: it is down 24.14% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter.

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