Trade-Ideas: Rambus (RMBS) Is Today's Strong On High Relative Volume Stock

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

  • RMBS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.1 million.
  • RMBS has traded 190,260 shares today.
  • RMBS is trading at 6.96 times the normal volume for the stock at this time of day.
  • RMBS is trading at a new high 4.04% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 RMBS:

Rambus Inc. operates as a technology solutions company in South Korea, the United States, Japan, Europe, Canada, Asia, and internationally. The company's technology solutions include memory, chip interfaces and architectures, end-to-end security, and advanced LED lighting. Currently there are 2 analysts that rate Rambus a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Rambus has been 764,000 shares per day over the past 30 days. Rambus has a market cap of $1.4 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.69 and a short float of 8.4% with 19.99 days to cover. Shares are up 25.3% 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 Rambus as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 9.1%. Since the same quarter one year prior, revenues rose by 32.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 157.14% and other important driving factors, this stock has surged by 41.21% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • 39.01% is the gross profit margin for RAMBUS INC which we consider to be strong. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, RMBS's net profit margin of 6.59% significantly trails the industry average.
  • Despite currently having a low debt-to-equity ratio of 0.41, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 8.58 is very high and demonstrates very strong liquidity.
  • 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 Semiconductors & Semiconductor Equipment industry and the overall market, RAMBUS INC's return on equity significantly trails that of both the industry average and the S&P 500.

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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