Strong On High Volume: Zagg (ZAGG)

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

  • ZAGG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.7 million.
  • ZAGG has traded 183,375 shares today.
  • ZAGG is trading at 7.53 times the normal volume for the stock at this time of day.
  • ZAGG is trading at a new high 16.09% 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 ZAGG:

ZAGG Inc, together with its subsidiaries, designs, produces, and distributes mobile accessory solutions. ZAGG has a PE ratio of 25.3. Currently there are 2 analysts that rate Zagg a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Zagg has been 397,300 shares per day over the past 30 days. Zagg has a market cap of $254.1 million and is part of the services sector and specialty retail industry. The stock has a beta of 1.10 and a short float of 5.6% with 5.39 days to cover. Shares are up 26.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Zagg as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • ZAGG's very impressive revenue growth greatly exceeded the industry average of 6.5%. Since the same quarter one year prior, revenues leaped by 53.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ZAGG 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 1.15, which illustrates the ability to avoid short-term cash problems.
  • Powered by its strong earnings growth of 714.28% and other important driving factors, this stock has surged by 91.49% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • ZAGG INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, ZAGG INC increased its bottom line by earning $0.35 versus $0.15 in the prior year. This year, the market expects an improvement in earnings ($0.52 versus $0.35).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Household Durables industry. The net income increased by 736.0% when compared to the same quarter one year prior, rising from -$2.04 million to $13.00 million.

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