Today's Weak On High Volume Stock: AirMedia Group (AMCN)

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

  • AMCN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $10.7 million.
  • AMCN has traded 309,515 shares today.
  • AMCN is trading at 4.20 times the normal volume for the stock at this time of day.
  • AMCN is trading at a new low 6.09% 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 AMCN:

AirMedia Group Inc. operates out-of-home advertising platforms primarily in the People's Republic of China. Currently there is 1 analyst that rates AirMedia Group a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for AirMedia Group has been 1.1 million shares per day over the past 30 days. AirMedia Group has a market cap of $282.5 million and is part of the services sector and media industry. Shares are up 84% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates AirMedia Group as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, AMCN's share price has jumped by 118.05%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • AMCN's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, AMCN has a quick ratio of 1.52, which demonstrates the ability of the company to cover short-term liquidity needs.
  • AMCN, with its decline in revenue, underperformed when compared the industry average of 7.3%. Since the same quarter one year prior, revenues fell by 14.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • AIRMEDIA GROUP INC -ADS 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, AIRMEDIA GROUP INC -ADS reported poor results of -$0.44 versus -$0.18 in the prior year. For the next year, the market is expecting a contraction of 22.3% in earnings (-$0.54 versus -$0.44).
  • 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 Media industry. The net income has significantly decreased by 868.4% when compared to the same quarter one year ago, falling from $1.46 million to -$11.20 million.

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