Enphase Energy (ENPH) Is Weak On High Volume Today

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 Enphase Energy ( ENPH) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Enphase Energy as such a stock due to the following factors:

  • ENPH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.4 million.
  • ENPH has traded 99,361 shares today.
  • ENPH is trading at 2.65 times the normal volume for the stock at this time of day.
  • ENPH is trading at a new low 3.06% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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 ENPH:

Enphase Energy, Inc., together with its subsidiaries, designs, develops, and sells microinverter systems for the solar photovoltaic industry in the United States and internationally. Currently there are 5 analysts that rate Enphase Energy a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Enphase Energy has been 722,600 shares per day over the past 30 days. Enphase Energy has a market cap of $552.0 million and is part of the technology sector and electronics industry. The stock has a beta of 0.28 and a short float of 23.4% with 10.81 days to cover. Shares are down 10.8% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Enphase Energy 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 Electrical Equipment industry and the overall market, ENPHASE ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • 35.44% is the gross profit margin for ENPHASE ENERGY INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 0.38% trails the industry average.
  • Net operating cash flow has increased to $8.88 million or 17.16% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -16.56%.
  • ENPH 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 the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.48, which illustrates the ability to avoid short-term cash problems.
  • This stock has increased by 66.49% 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 ENPH do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

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