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.

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

  • ACTG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.3 million.
  • ACTG has traded 437,645 shares today.
  • ACTG is trading at 27.91 times the normal volume for the stock at this time of day.
  • ACTG is trading at a new high 14.07% 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 ACTG:

Acacia Research Corporation, through its subsidiaries, invests in, develops, licenses, and enforces patented technologies in the United States. The stock currently has a dividend yield of 5.1%. Currently there are 4 analysts that rate Acacia Research Corporation a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Acacia Research Corporation has been 581,800 shares per day over the past 30 days. Acacia Research has a market cap of $502.0 million and is part of the services sector and diversified services industry. The stock has a beta of 1.61 and a short float of 25% with 20.13 days to cover. Shares are down 42% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Acacia Research Corporation as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • 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 Professional Services industry and the overall market, ACACIA RESEARCH CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$9.71 million or 840.91% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • ACTG's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 32.73%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • ACACIA RESEARCH CORP 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, ACACIA RESEARCH CORP reported poor results of -$1.38 versus -$1.18 in the prior year. This year, the market expects an improvement in earnings ($0.61 versus -$1.38).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Professional Services industry. The net income increased by 51.3% when compared to the same quarter one year prior, rising from -$33.33 million to -$16.24 million.

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