Trade-Ideas LLC identified

Gigamon

(

GIMO

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

  • GIMO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.0 million.
  • GIMO has traded 67,158 shares today.
  • GIMO is trading at 2.45 times the normal volume for the stock at this time of day.
  • GIMO is trading at a new low 4.02% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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 GIMO:

Gigamon Inc. designs, develops, and sells products and services that provide customers with visibility and control of network traffic for enterprises and services providers in the United States, rest of Americas, Europe, the Middle East, Africa, and the Asia Pacific. GIMO has a PE ratio of 178. Currently there are 4 analysts that rate Gigamon a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Gigamon has been 473,100 shares per day over the past 30 days. Gigamon has a market cap of $1.1 billion and is part of the technology sector and computer hardware industry. Shares are up 19.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Gigamon as a

sell

. Among the areas we feel are negative, one of the most important has been unimpressive growth in net income over time.

Highlights from the ratings report include:

  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Software industry average. The net income has decreased by 11.8% when compared to the same quarter one year ago, dropping from $2.91 million to $2.56 million.
  • Compared to its closing price of one year ago, GIMO's share price has jumped by 45.13%, exceeding the performance of the broader market during that same time frame. 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. When compared to other companies in the Software industry and the overall market, GIGAMON INC's return on equity is below that of both the industry average and the S&P 500.
  • GIGAMON INC's earnings per share declined by 22.2% 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, GIGAMON INC turned its bottom line around by earning $0.17 versus -$1.27 in the prior year. This year, the market expects an improvement in earnings ($1.01 versus $0.17).
  • The gross profit margin for GIGAMON INC is currently very high, coming in at 83.89%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, GIMO's net profit margin of 3.82% significantly trails the industry average.

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