Strong On High Volume: IRobot (IRBT)

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

  • IRBT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $21.1 million.
  • IRBT has traded 170,889 shares today.
  • IRBT is trading at 4.05 times the normal volume for the stock at this time of day.
  • IRBT is trading at a new high 3.00% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in IRBT with the Ticky from Trade-Ideas. See the FREE profile for IRBT NOW at Trade-Ideas

More details on IRBT:

iRobot Corporation designs, develops, and markets robots for consumer, defense and security, telemedicine, and video collaboration markets worldwide. The company operates in two segments, Home Robots and Defense and Security Robots. IRBT has a PE ratio of 37.4. Currently there are 3 analysts that rate iRobot a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for iRobot has been 586,000 shares per day over the past 30 days. iRobot has a market cap of $918.2 million and is part of the consumer goods sector and consumer durables industry. The stock has a beta of 2.02 and a short float of 34.4% with 12.78 days to cover. Shares are down 7.2% year-to-date as of the close of trading on Thursday.

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 iRobot 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, increase in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.5%. Since the same quarter one year prior, revenues slightly increased by 7.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • IRBT 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 this, the company maintains a quick ratio of 2.99, which clearly demonstrates the ability to cover short-term cash needs.
  • IROBOT CORP reported flat earnings per share in the most recent quarter. 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, IROBOT CORP increased its bottom line by earning $0.94 versus $0.61 in the prior year. This year, the market expects an improvement in earnings ($1.15 versus $0.94).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Household Durables industry average. The net income increased by 2.8% when compared to the same quarter one year prior, going from $8.29 million to $8.53 million.
  • 46.71% is the gross profit margin for IROBOT CORP which we consider to be strong. Regardless of IRBT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, IRBT's net profit margin of 6.10% compares favorably to the industry average.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

null

More from Markets

Trump, China Trade, Target and Las Vegas Casinos - 5 Things You Must Know

Trump, China Trade, Target and Las Vegas Casinos - 5 Things You Must Know

Stocks Move Lower on Trade Fears and 4 Other Stories You Must Know Wednesday

Stocks Move Lower on Trade Fears and 4 Other Stories You Must Know Wednesday

Global Rally Stalls as Trump Doubts North Korea Summit, Questions China Trade

Global Rally Stalls as Trump Doubts North Korea Summit, Questions China Trade

Target Slumps After Q1 Earnings Miss as Comparable Sales Slow, Traffic Improves

Target Slumps After Q1 Earnings Miss as Comparable Sales Slow, Traffic Improves

Pound Slides as Inflation Slows, Doubts Grow Over Bank of England Rate Hikes

Pound Slides as Inflation Slows, Doubts Grow Over Bank of England Rate Hikes