Liquidity Service (LQDT) Moving On Heavy Pre-Market Trading

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 Liquidity Service ( LQDT) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Liquidity Service as such a stock due to the following factors:

  • LQDT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.0 million.
  • LQDT traded 70,496 shares today in the pre-market hours as of 9:10 AM, representing 10.3% of its average daily volume.

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More details on LQDT:

Liquidity Services, Inc. operates online auction marketplaces for sellers and buyers of surplus, salvage, and scrap assets in the United States. LQDT has a PE ratio of 21.1. Currently there are 6 analysts that rate Liquidity Service a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for Liquidity Service has been 503,700 shares per day over the past 30 days. Liquidity Service has a market cap of $842.4 million and is part of the services sector and retail industry. The stock has a beta of -1.42 and a short float of 30% with 12.16 days to cover. Shares are up 15% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Liquidity Service as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • LQDT has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.50, which illustrates the ability to avoid short-term cash problems.
  • LIQUIDITY SERVICES INC has improved earnings per share by 10.0% 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, LIQUIDITY SERVICES INC reported lower earnings of $1.26 versus $1.47 in the prior year. This year, the market expects an improvement in earnings ($1.65 versus $1.26).
  • The gross profit margin for LIQUIDITY SERVICES INC is currently lower than what is desirable, coming in at 31.56%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 5.81% significantly trails the industry average.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Internet Software & Services industry and the overall market, LIQUIDITY SERVICES INC's return on equity is below that of both the industry average and the S&P 500.

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