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Trade-Ideas LLC identified

Open Text

(

OTEX

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

  • OTEX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.2 million.
  • OTEX has traded 196,559 shares today.
  • OTEX is trading at 29.75 times the normal volume for the stock at this time of day.
  • OTEX is trading at a new high 3.07% 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 OTEX:

TheStreet Recommends

Open Text Corporation provides a suite of software products and services that assist organizations in finding, utilizing, and sharing business information from various devices. The stock currently has a dividend yield of 1.5%. OTEX has a PE ratio of 3. Currently there are 8 analysts that rate Open Text a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Open Text has been 265,700 shares per day over the past 30 days. Open Text has a market cap of $6.6 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 0.45 and a short float of 2.2% with 11.49 days to cover. Shares are up 13% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Open Text as a

buy

. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, reasonable valuation levels, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:

  • OPEN TEXT CORP has improved earnings per share by 20.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, OPEN TEXT CORP increased its bottom line by earning $1.91 versus $1.81 in the prior year. This year, the market expects an improvement in earnings ($3.64 versus $1.91).
  • 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 18.0% when compared to the same quarter one year prior, going from $74.29 million to $87.69 million.
  • The gross profit margin for OPEN TEXT CORP is currently very high, coming in at 74.00%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 18.84% is above that of the industry average.
  • Net operating cash flow has increased to $123.94 million or 13.10% when compared to the same quarter last year. Despite an increase in cash flow, OPEN TEXT CORP's average is still marginally south of the industry average growth rate of 19.23%.

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