Weak On High Volume: Pitney Bowes (PBI) - TheStreet

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

Pitney Bowes

(

PBI

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

  • PBI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $40.3 million.
  • PBI has traded 280,206 shares today.
  • PBI is trading at 5.05 times the normal volume for the stock at this time of day.
  • PBI is trading at a new low 3.07% 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 PBI:

Pitney Bowes Inc. provides technology solutions in the United States and internationally. The stock currently has a dividend yield of 3%. PBI has a PE ratio of 17.5. Currently there are 2 analysts that rate Pitney Bowes a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Pitney Bowes has been 1.8 million shares per day over the past 30 days. Pitney Bowes has a market cap of $5.1 billion and is part of the consumer goods sector and consumer durables industry. The stock has a beta of 1.68 and a short float of 10.8% with 13.19 days to cover. Shares are up 7.8% year-to-date as of the close of trading on Wednesday.

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 Pitney Bowes as a

buy

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, revenue growth, good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Services & Supplies industry. The net income increased by 1121.0% when compared to the same quarter one year prior, rising from -$9.23 million to $94.27 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.7%. Since the same quarter one year prior, revenues slightly increased by 0.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has increased to $174.83 million or 19.03% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -8.68%.
  • PITNEY BOWES INC has improved earnings per share by 10.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PITNEY BOWES INC reported lower earnings of $1.45 versus $1.97 in the prior year. This year, the market expects an improvement in earnings ($1.85 versus $1.45).

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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