Trade-Ideas LLC identified

MicroStrategy

(

MSTR

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

  • MSTR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $20.1 million.
  • MSTR has traded 89,022 shares today.
  • MSTR is trading at 31.21 times the normal volume for the stock at this time of day.
  • MSTR is trading at a new low 13.20% 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 MSTR:

MicroStrategy Incorporated designs, develops, markets, and sells enterprise-ready analytics, mobile, and security software platforms worldwide. MSTR has a PE ratio of 33. Currently there are 3 analysts that rate MicroStrategy a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for MicroStrategy has been 112,600 shares per day over the past 30 days. MicroStrategy has a market cap of $1.8 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.68 and a short float of 4.1% with 4.88 days to cover. Shares are up 15.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates MicroStrategy as a

buy

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, notable return on equity, reasonable valuation levels and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:

  • Powered by its strong earnings growth of 314.28% and other important driving factors, this stock has surged by 31.12% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 317.3% when compared to the same quarter one year prior, rising from -$10.34 million to $22.47 million.
  • 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 Software industry and the overall market, MICROSTRATEGY INC's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 907.99% to $36.19 million when compared to the same quarter last year. In addition, MICROSTRATEGY INC has also vastly surpassed the industry average cash flow growth rate of -12.64%.

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