Strong On High Volume: NTELOS Holdings (NTLS)

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

  • NTLS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.1 million.
  • NTLS has traded 110,472 shares today.
  • NTLS is trading at 4.01 times the normal volume for the stock at this time of day.
  • NTLS is trading at a new high 7.16% 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 NTLS:

NTELOS Holdings Corp., through its subsidiaries, provides digital wireless communications services to consumers and businesses in Virginia and West Virginia, as well as parts of Maryland, North Carolina, Pennsylvania, Ohio, and Kentucky. The stock currently has a dividend yield of 43.4%. NTLS has a PE ratio of 48.4. Currently there are 3 analysts that rate NTELOS Holdings a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for NTELOS Holdings has been 431,300 shares per day over the past 30 days. NTELOS has a market cap of $83.6 million and is part of the technology sector and telecommunications industry. The stock has a beta of 1.63 and a short float of 22.3% with 3.09 days to cover. Shares are down 80.7% 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 NTELOS Holdings as a hold. The company's strongest point has been its a solid financial position based on a variety of debt and liquidity measures that we have looked at. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and poor profit margins.

Highlights from the ratings report include:
  • The revenue fell significantly faster than the industry average of 58.3%. Since the same quarter one year prior, revenues slightly dropped by 1.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • NTELOS HOLDINGS CORP 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, NTELOS HOLDINGS CORP increased its bottom line by earning $1.12 versus $0.87 in the prior year. For the next year, the market is expecting a contraction of 101.8% in earnings (-$0.02 versus $1.12).
  • The debt-to-equity ratio is very high at 18.17 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, NTLS has managed to keep a strong quick ratio of 1.92, which demonstrates the ability to cover short-term cash needs.
  • 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 92.4% when compared to the same quarter one year ago, falling from $10.58 million to $0.80 million.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 80.20%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 91.66% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, NTLS is still more expensive than most of the other companies in its industry.

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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