Trade-Ideas LLC identified

Sigma Designs

(

SIGM

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

  • SIGM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.2 million.
  • SIGM has traded 351,658 shares today.
  • SIGM is trading at 12.09 times the normal volume for the stock at this time of day.
  • SIGM is trading at a new high 5.16% 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 SIGM:

Sigma Designs, Inc., an integrated semiconductor solutions provider, provides intelligent media platforms for use in the home entertainment and home control markets. Currently there are 6 analysts that rate Sigma Designs a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Sigma Designs has been 570,800 shares per day over the past 30 days. Sigma Designs has a market cap of $319.4 million and is part of the technology sector and electronics industry. The stock has a beta of 1.33 and a short float of 4% with 1.86 days to cover. Shares are down 18.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Sigma Designs as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and compelling growth in net income. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 9.6%. Since the same quarter one year prior, revenues rose by 14.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SIGM 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 2.57, which clearly demonstrates the ability to cover short-term cash needs.
  • SIGMA DESIGNS 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, SIGMA DESIGNS INC reported poor results of -$0.63 versus -$0.32 in the prior year. This year, the market expects an improvement in earnings ($0.36 versus -$0.63).
  • Powered by its strong earnings growth of 950.00% and other important driving factors, this stock has surged by 80.36% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
  • 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. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, SIGMA DESIGNS INC's return on equity significantly trails that of both the industry average and the S&P 500.

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