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Trade-Ideas LLC identified

Hollysys Automation Technologies

(

HOLI

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

  • HOLI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.4 million.
  • HOLI has traded 65,756 shares today.
  • HOLI is trading at 3.26 times the normal volume for the stock at this time of day.
  • HOLI is trading at a new low 6.03% 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 HOLI:

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TheStreet Recommends

Hollysys Automation Technologies Ltd. provides automation and control technologies and products to customers in industrial, railway, subway, nuclear power, and mechanical and electronic industries in China, Southeast Asia, India, Europe, and the Middle East. The stock currently has a dividend yield of 2.4%. HOLI has a PE ratio of 1. Currently there is 1 analyst that rates Hollysys Automation Technologies a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Hollysys Automation Technologies has been 323,500 shares per day over the past 30 days. Hollysys Automation has a market cap of $978.7 million and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.43 and a short float of 1.1% with 1.08 days to cover. Shares are down 24.4% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Hollysys Automation Technologies 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, largely solid financial position with reasonable debt levels by most measures, notable return on equity and good cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • HOLLYSYS AUTOMATION TECH LTD has improved earnings per share by 8.7% 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, HOLLYSYS AUTOMATION TECH LTD increased its bottom line by earning $1.62 versus $1.19 in the prior year. This year, the market expects an improvement in earnings ($1.83 versus $1.62).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Electronic Equipment, Instruments & Components industry average. The net income increased by 11.7% when compared to the same quarter one year prior, going from $27.10 million to $30.26 million.
  • HOLI's debt-to-equity ratio is very low at 0.06 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, HOLI has a quick ratio of 2.11, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, HOLLYSYS AUTOMATION TECH LTD's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 965.49% to $6.87 million when compared to the same quarter last year. In addition, HOLLYSYS AUTOMATION TECH LTD has also vastly surpassed the industry average cash flow growth rate of -8.94%.

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