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Trade-Ideas LLC identified

Wipro

(

WIT

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

  • WIT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.0 million.
  • WIT has traded 163,785 shares today.
  • WIT is trading at 9.64 times the normal volume for the stock at this time of day.
  • WIT is trading at a new low 3.08% 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 WIT:

Wipro Limited operates as an information technology (IT), consulting, and business process services company worldwide. The stock currently has a dividend yield of 0.7%. WIT has a PE ratio of 23. Currently there are no analysts that rate Wipro a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Wipro has been 512,800 shares per day over the past 30 days. Wipro has a market cap of $30.7 billion and is part of the technology sector and computer software & services industry. Shares are up 7% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Wipro 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, reasonable valuation levels and increase in stock price during the past year. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • WIT's revenue growth has slightly outpaced the industry average of 7.7%. Since the same quarter one year prior, revenues slightly increased by 1.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • WIT's debt-to-equity ratio is very low at 0.27 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, WIT has a quick ratio of 1.94, which demonstrates the ability of the company to cover short-term liquidity needs.
  • WIPRO LTD's earnings per share declined by 6.7% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, WIPRO LTD's EPS of $0.55 remained unchanged from the prior years' EPS of $0.55. This year, the market expects an improvement in earnings ($0.57 versus $0.55).
  • After a year of stock price fluctuations, the net result is that WIT's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.

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