Trade-Ideas: Endurance International Group Holdings (EIGI) Is Today's Strong On High Relative Volume Stock

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

  • EIGI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $103.0 million.
  • EIGI has traded 336,308 shares today.
  • EIGI is trading at 8.70 times the normal volume for the stock at this time of day.
  • EIGI is trading at a new high 8.05% 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.

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More details on EIGI:

Endurance International Group Holdings, Inc., together with its subsidiaries, provides cloud-based platform solutions for small-and medium-sized businesses worldwide. Currently there are 5 analysts that rate Endurance International Group Holdings a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Endurance International Group Holdings has been 1.6 million shares per day over the past 30 days. Endurance International Group has a market cap of $2.5 billion and is part of the technology sector and computer software & services industry. Shares are up 4.1% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Endurance International Group Holdings as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.8%. Since the same quarter one year prior, revenues rose by 26.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 96.22% and other important driving factors, this stock has surged by 44.98% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.
  • The gross profit margin for ENDURANCE INTL GRP HLDGS INC is rather high; currently it is at 62.44%. 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 -1.28% is in-line with the industry average.
  • 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 Internet Software & Services industry and the overall market, ENDURANCE INTL GRP HLDGS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The debt-to-equity ratio is very high at 6.28 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.11, which clearly demonstrates the inability to cover short-term cash needs.

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