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

  • QLGC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.9 million.
  • QLGC has traded 113,859 shares today.
  • QLGC is trading at 4.54 times the normal volume for the stock at this time of day.
  • QLGC is trading at a new high 3.05% 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 QLGC with the Ticky from Trade-Ideas. See the FREE profile for QLGC NOW at Trade-Ideas

More details on QLGC:

QLogic Corporation designs and supplies high performance server and storage networking infrastructure products that provide, enhance, and manage computer data communication. Its products facilitate the transfer of data and enable resource sharing between servers, networks, and storage. Currently there are no analysts that rate QLogic a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for QLogic has been 1.0 million shares per day over the past 30 days. QLogic has a market cap of $1.1 billion and is part of the technology sector and electronics industry. The stock has a beta of 2.11 and a short float of 2% with 2.47 days to cover. Shares are up 8.6% 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 QLogic as a hold. 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 and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 13.5%. Since the same quarter one year prior, revenues rose by 13.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • QLGC 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 5.05, which clearly demonstrates the ability to cover short-term cash needs.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • QLOGIC CORP's earnings per share declined by 7.7% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, QLOGIC CORP swung to a loss, reporting -$0.20 versus $0.80 in the prior year. This year, the market expects an improvement in earnings ($0.99 versus -$0.20).
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Computers & Peripherals industry and the overall market, QLOGIC CORP'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.

null

More from Markets

Stocks Rise as Bond Yields Inch Closer to 3% Threshold

Stocks Rise as Bond Yields Inch Closer to 3% Threshold

Akorn's Stock Crashes as Germany's Fresenius Ends Takeover Amid Data Allegations

Akorn's Stock Crashes as Germany's Fresenius Ends Takeover Amid Data Allegations

Trump to Blame for Oil's Recent Surge, Not OPEC

Trump to Blame for Oil's Recent Surge, Not OPEC

3 Things Investors Must Know for Monday

3 Things Investors Must Know for Monday

U.S. Earnings On Pace for Best Season in Two Decades but Tech Giants Await

U.S. Earnings On Pace for Best Season in Two Decades but Tech Giants Await