Trade-Ideas LLC identified

Ubiquiti Networks

(

UBNT

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

  • UBNT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.0 million.
  • UBNT has traded 110,246 shares today.
  • UBNT is trading at 7.73 times the normal volume for the stock at this time of day.
  • UBNT is trading at a new low 6.02% 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 UBNT:

TST Recommends

Ubiquiti Networks, Inc. provides networking products and solutions for service providers and enterprises worldwide. UBNT has a PE ratio of 24. Currently there are no analysts that rate Ubiquiti Networks a buy, 2 analysts rate it a sell, and 8 rate it a hold.

The average volume for Ubiquiti Networks has been 569,700 shares per day over the past 30 days. Ubiquiti has a market cap of $3.0 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 1.14 and a short float of 34.7% with 26.21 days to cover. Shares are up 8.2% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Ubiquiti Networks as a

buy

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins, increase in stock price during the past year and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • UBNT's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 7.31, which clearly demonstrates the ability to cover short-term cash needs.
  • 46.76% is the gross profit margin for UBIQUITI NETWORKS INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, UBNT's net profit margin of 3.11% significantly trails the industry average.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.7%. Since the same quarter one year prior, revenues slightly dropped by 6.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • UBIQUITI NETWORKS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, UBIQUITI NETWORKS INC reported lower earnings of $1.45 versus $1.97 in the prior year. This year, the market expects an improvement in earnings ($2.01 versus $1.45).

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