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 $24.6 million.
  • UBNT has traded 93,122 shares today.
  • UBNT is trading at 6.60 times the normal volume for the stock at this time of day.
  • UBNT is trading at a new low 3.02% 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:

Ubiquiti Networks, Inc. provides networking products and solutions for service providers and enterprises worldwide. UBNT has a PE ratio of 18. Currently there are no analysts that rate Ubiquiti Networks a buy, 4 analysts rate it a sell, and 7 rate it a hold.

The average volume for Ubiquiti Networks has been 464,500 shares per day over the past 30 days. Ubiquiti has a market cap of $2.5 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 0.56 and a short float of 33% with 10.85 days to cover. Shares are down 6% 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 revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, increase in net income 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:

  • UBNT's revenue growth has slightly outpaced the industry average of 4.9%. Since the same quarter one year prior, revenues slightly increased by 0.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 7.99, which clearly demonstrates the ability to cover short-term cash needs.
  • 49.61% 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. Along with this, the net profit margin of 35.50% significantly outperformed against the industry average.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 42.4% when compared to the same quarter one year prior, rising from $37.74 million to $53.76 million.
  • Net operating cash flow has slightly increased to $47.73 million or 1.67% when compared to the same quarter last year. Despite an increase in cash flow, UBIQUITI NETWORKS INC's average is still marginally south of the industry average growth rate of 8.91%.

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