NII Holdings (NIHD) Highlighted As Weak On High Volume

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

  • NIHD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.5 million.
  • NIHD has traded 2.4 million shares today.
  • NIHD is trading at 2.44 times the normal volume for the stock at this time of day.
  • NIHD is trading at a new low 10.32% 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 NIHD:

NII Holdings, Inc., through its subsidiaries, provides wireless communication services under the Nextel brand name to businesses and individuals. It operates through Brazil, Mexico, Argentina, and Chile segments. Currently there is 1 analyst that rates NII Holdings a buy, 3 analysts rate it a sell, and 2 rate it a hold.

The average volume for NII Holdings has been 6.9 million shares per day over the past 30 days. NII has a market cap of $28.1 million and is part of the technology sector and telecommunications industry. Shares are down 94.4% year-to-date as of the close of trading on Monday.

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 NII Holdings as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, poor profit margins, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Wireless Telecommunication Services industry. The net income has significantly decreased by 81.2% when compared to the same quarter one year ago, falling from -$207.50 million to -$376.08 million.
  • The gross profit margin for NII HOLDINGS INC is currently lower than what is desirable, coming in at 33.93%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -40.04% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$485.56 million or 240.43% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 97.38%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 102.77% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • NII HOLDINGS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, NII HOLDINGS INC reported poor results of -$9.34 versus -$3.47 in the prior year. This year, the market expects an improvement in earnings (-$8.30 versus -$9.34).

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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