Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified F5 Networks as such a stock due to the following factors:
- FFIV has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $169.6 million.
- FFIV has traded 161,932 shares today.
- FFIV is trading at 2.43 times the normal volume for the stock at this time of day.
- FFIV is trading at a new high 3.10% 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 FFIV:
F5 Networks, Inc. provides application delivery networking technology that secures and optimizes the delivery of network-based applications, and the security, performance, and availability of servers and other network resources. FFIV has a PE ratio of 23.4. Currently there are 14 analysts that rate F5 Networks a buy, no analysts rate it a sell, and 13 rate it a hold.
The average volume for F5 Networks has been 1.7 million shares per day over the past 30 days. F5 has a market cap of $6.3 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 2.47 and a short float of 5.8% with 2.22 days to cover. Shares are down 17.3% year to date as of the close of trading on Tuesday.
rates F5 Networks as a
. 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 expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and premium valuation.
Highlights from the ratings report include:
- FFIV's revenue growth trails the industry average of 14.7%. Since the same quarter one year prior, revenues slightly increased by 3.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- FFIV 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 the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.37, which illustrates the ability to avoid short-term cash problems.
- F5 NETWORKS INC's earnings per share declined by 7.0% 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, F5 NETWORKS INC increased its bottom line by earning $3.45 versus $2.97 in the prior year. This year, the market expects an improvement in earnings ($4.46 versus $3.45).
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Communications Equipment industry average. The net income has decreased by 7.6% when compared to the same quarter one year ago, dropping from $68.64 million to $63.41 million.
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, FFIV has underperformed the S&P 500 Index, declining 17.10% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- You can view the full F5 Networks Ratings Report.