Sky-mobi (MOBI) Flagged As Strong 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 Sky-mobi ( MOBI) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Sky-mobi as such a stock due to the following factors:

  • MOBI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.7 million.
  • MOBI has traded 244,331 shares today.
  • MOBI is trading at 5.33 times the normal volume for the stock at this time of day.
  • MOBI is trading at a new high 8.01% 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 MOBI:

Sky-mobi Limited, through its subsidiaries, is engaged in the operation of a mobile application platform embedded on mobile phones to provide mobile application store and services in the People's Republic of China. MOBI has a PE ratio of 83.2.

The average volume for Sky-mobi has been 707,000 shares per day over the past 30 days. Sky-mobi has a market cap of $227.6 million and is part of the technology sector and computer software & services industry. Shares are up 114.8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Sky-mobi 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 and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • MOBI 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 3.79, which clearly demonstrates the ability to cover short-term cash needs.
  • The revenue fell significantly faster than the industry average of 11.6%. Since the same quarter one year prior, revenues fell by 26.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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. Compared to other companies in the Software industry and the overall market, SKY-MOBI LTD -ADR's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for SKY-MOBI LTD -ADR is currently lower than what is desirable, coming in at 25.37%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 3.99% significantly trails the industry average.

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