Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified

Performant Financial

(

PFMT

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

  • PFMT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.4 million.
  • PFMT has traded 123,727 shares today.
  • PFMT is trading at 6.51 times the normal volume for the stock at this time of day.
  • PFMT is trading at a new high 13.48% 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 PFMT:

TST Recommends

Performant Financial Corporation, together with its subsidiaries, provides technology-enabled recovery and related analytics services in the United States. PFMT has a PE ratio of 13.5. Currently there are 2 analysts that rate Performant Financial a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Performant Financial has been 346,700 shares per day over the past 30 days. Performant Financial has a market cap of $266.3 million and is part of the services sector and diversified services industry. The stock has a beta of 1.44 and a short float of 2.6% with 0.75 days to cover. Shares are down 19.7% year-to-date as of the close of trading on Monday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Performant Financial as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, poor profit margins, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

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 Commercial Services & Supplies industry. The net income has significantly decreased by 103.1% when compared to the same quarter one year ago, falling from $15.45 million to -$0.48 million.
  • The gross profit margin for PERFORMANT FINANCIAL CORP is currently extremely low, coming in at 12.28%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -1.20% trails that of the industry average.
  • Net operating cash flow has significantly decreased to $4.83 million or 79.35% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 30.15%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 103.22% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • PERFORMANT FINANCIAL CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, PERFORMANT FINANCIAL CORP increased its bottom line by earning $0.74 versus $0.44 in the prior year. For the next year, the market is expecting a contraction of 55.4% in earnings ($0.33 versus $0.74).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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