Trade-Ideas LLC identified
) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Proofpoint as such a stock due to the following factors:
- PFPT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $23.1 million.
- PFPT has traded 108,056 shares today.
- PFPT is trading at 3.24 times the normal volume for the stock at this time of day.
- PFPT is trading at a new low 4.01% 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 PFPT:
Proofpoint, Inc. provides threat protection, incident response, regulatory compliance, archiving, governance, eDiscovery, and secure communication solutions worldwide. Currently there are 15 analysts that rate Proofpoint a buy, no analysts rate it a sell, and none rate it a hold.
The average volume for Proofpoint has been 675,800 shares per day over the past 30 days. Proofpoint has a market cap of $2.4 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.41 and a short float of 23.4% with 18.92 days to cover. Shares are down 11.8% year-to-date as of the close of trading on Thursday.
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rates Proofpoint as a
. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally high debt management risk 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 Software industry. The net income has significantly decreased by 45.8% when compared to the same quarter one year ago, falling from -$21.71 million to -$31.66 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Software industry and the overall market, PROOFPOINT INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The debt-to-equity ratio is very high at 5.01 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, PFPT has managed to keep a strong quick ratio of 1.90, which demonstrates the ability to cover short-term cash needs.
- PROOFPOINT INC's earnings per share declined by 37.5% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, PROOFPOINT INC reported poor results of -$2.67 versus -$1.71 in the prior year. This year, the market expects an improvement in earnings (-$0.14 versus -$2.67).
- After a year of stock price fluctuations, the net result is that PFPT's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- You can view the full Proofpoint Ratings Report.