Trade-Ideas LLC identified

Mitek Systems

(

MITK

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

  • MITK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.3 million.
  • MITK has traded 136,540 shares today.
  • MITK is trading at 5.70 times the normal volume for the stock at this time of day.
  • MITK is trading at a new high 5.07% 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 MITK:

Mitek Systems, Inc. develops, markets, and sells mobile capture and identity verification software solutions for enterprise customers in the Unites States. MITK has a PE ratio of 85. Currently there are 3 analysts that rate Mitek Systems a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Mitek Systems has been 569,300 shares per day over the past 30 days. Mitek Systems has a market cap of $190.7 million and is part of the technology sector and computer software & services industry. The stock has a beta of 0.34 and a short float of 6.2% with 3.70 days to cover. Shares are up 48.9% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Mitek Systems 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 good cash flow from operations. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 4.9%. Since the same quarter one year prior, revenues rose by 37.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • MITK 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. Along with this, the company maintains a quick ratio of 4.02, which clearly demonstrates the ability to cover short-term cash needs.
  • MITEK SYSTEMS INC's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. 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, MITEK SYSTEMS INC turned its bottom line around by earning $0.08 versus -$0.17 in the prior year. This year, the market expects an improvement in earnings ($0.22 versus $0.08).
  • 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. When compared to other companies in the Software industry and the overall market, MITEK SYSTEMS INC's return on equity is below that of both the industry average and the S&P 500.
  • 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 Software industry. The net income has significantly decreased by 320.5% when compared to the same quarter one year ago, falling from $0.15 million to -$0.32 million.

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