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

Iridium Communications

(

IRDM

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

  • IRDM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $16.8 million.
  • IRDM has traded 152,314 shares today.
  • IRDM is trading at 6.23 times the normal volume for the stock at this time of day.
  • IRDM is trading at a new low 3.04% 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 IRDM:

Iridium Communications Inc. provides mobile voice and data communications services through satellite to businesses, the U.S. and foreign governments, non-governmental organizations, and consumers worldwide. IRDM has a PE ratio of 14.7. Currently there are 4 analysts that rate Iridium Communications a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Iridium Communications has been 840,400 shares per day over the past 30 days. Iridium has a market cap of $910.2 million and is part of the technology sector and telecommunications industry. The stock has a beta of 1.14 and a short float of 23.3% with 8.30 days to cover. Shares are up 1% year-to-date as of the close of trading on Thursday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Iridium Communications as a

buy

. 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, expanding profit margins, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:

  • IRDM's revenue growth has slightly outpaced the industry average of 2.5%. Since the same quarter one year prior, revenues slightly increased by 6.9%. 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.
  • The debt-to-equity ratio is somewhat low, currently at 0.90, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with this, the company maintains a quick ratio of 5.18, which clearly demonstrates the ability to cover short-term cash needs.
  • Compared to its closing price of one year ago, IRDM's share price has jumped by 54.53%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, IRDM should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The gross profit margin for IRIDIUM COMMUNICATIONS INC is currently very high, coming in at 70.59%. It has increased from the same quarter the previous year.
  • Net operating cash flow has increased to $62.14 million or 40.99% when compared to the same quarter last year. In addition, IRIDIUM COMMUNICATIONS INC has also vastly surpassed the industry average cash flow growth rate of -27.50%.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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