Trade-Ideas: Glu Mobile (GLUU) Is Today's

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 Glu Mobile ( GLUU) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Glu Mobile as such a stock due to the following factors:

  • GLUU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $92.9 million.
  • GLUU has traded 164,207 shares today.
  • GLUU is up 3.4% today.
  • GLUU was down 18.7% yesterday.

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More details on GLUU:

Glu Mobile Inc. develops and publishes a portfolio of action/adventure and casual games for the smartphones and tablet devices users. Currently there are 8 analysts that rate Glu Mobile a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Glu Mobile has been 6.0 million shares per day over the past 30 days. Glu Mobile has a market cap of $562.7 million and is part of the technology sector and computer software & services industry. The stock has a beta of 4.05 and a short float of 17.8% with 0.75 days to cover. Shares are up 77.8% 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 Glu Mobile as a sell. The area that we feel has been the company's primary weakness has been its disappointing return on equity.

Highlights from the ratings report include:
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Software industry and the overall market, GLU MOBILE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for GLU MOBILE INC is currently very high, coming in at 71.78%. Regardless of GLUU's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GLUU's net profit margin of 0.29% is significantly lower than the industry average.
  • Net operating cash flow has significantly increased by 201.38% to $3.79 million when compared to the same quarter last year. In addition, GLU MOBILE INC has also vastly surpassed the industry average cash flow growth rate of 39.30%.
  • GLUU 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 1.45, which illustrates the ability to avoid short-term cash problems.
  • This stock has increased by 162.17% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in GLUU do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

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