Trade-Ideas LLC identified

Lexmark International

(

LXK

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

  • LXK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $16.9 million.
  • LXK has traded 109,219 shares today.
  • LXK is trading at 4.34 times the normal volume for the stock at this time of day.
  • LXK is trading at a new high 3.05% 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 LXK:

Lexmark International, Inc., together with its subsidiaries, operates as a developer, manufacturer, and supplier of printing, imaging, device management, managed print services (MPS), document workflow, and business process and content management solutions worldwide. The stock currently has a dividend yield of 4.5%. Currently there are no analysts that rate Lexmark International a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Lexmark International has been 725,000 shares per day over the past 30 days. Lexmark International has a market cap of $2.0 billion and is part of the technology sector and computer hardware industry. The stock has a beta of 1.49 and a short float of 3.7% with 2.82 days to cover. Shares are up 0.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Lexmark International as a

hold

. The company's strengths can be seen in multiple areas, such as its increase in net income, expanding profit margins and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Computers & Peripherals industry. The net income increased by 52.6% when compared to the same quarter one year prior, rising from -$22.60 million to -$10.70 million.
  • 46.75% is the gross profit margin for LEXMARK INTL INC which we consider to be strong. 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 -1.08% is in-line with the industry average.
  • LEXMARK INTL INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. 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, LEXMARK INTL INC swung to a loss, reporting -$0.65 versus $1.25 in the prior year. This year, the market expects an improvement in earnings ($3.54 versus -$0.65).
  • Net operating cash flow has decreased to $103.10 million or 45.18% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Computers & Peripherals industry and the overall market, LEXMARK INTL INC's return on equity significantly trails that of both the industry average and the S&P 500.

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