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

  • PXLW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.2 million.
  • PXLW has traded 449,271 shares today.
  • PXLW is trading at 6.51 times the normal volume for the stock at this time of day.
  • PXLW is trading at a new high 11.04% 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 PXLW:

Pixelworks, Inc. designs, develops, and markets video and pixel processing semiconductors, software, and custom ASIC solutions for digital video applications. Currently there is 1 analyst that rates Pixelworks a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Pixelworks has been 1.2 million shares per day over the past 30 days. Pixelworks has a market cap of $150.3 million and is part of the technology sector and electronics industry. The stock has a beta of 0.36 and a short float of 13.1% with 3.23 days to cover. Shares are up 38.8% year-to-date as of the close of trading on Friday.

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 Pixelworks 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 Semiconductors & Semiconductor Equipment industry and the overall market, PIXELWORKS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for PIXELWORKS INC is rather high; currently it is at 58.04%. Regardless of PXLW's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PXLW's net profit margin of -15.70% significantly underperformed when compared to the industry average.
  • PIXELWORKS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. 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, PIXELWORKS INC reported poor results of -$0.48 versus -$0.31 in the prior year. This year, the market expects an improvement in earnings ($0.02 versus -$0.48).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 51.6% when compared to the same quarter one year prior, rising from -$4.92 million to -$2.38 million.
  • This stock has increased by 75.40% 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 PXLW do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

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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