Calix (CALX) Is Today's Strong On High 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 Calix ( CALX) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Calix as such a stock due to the following factors:

  • CALX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.7 million.
  • CALX has traded 122,862 shares today.
  • CALX is trading at 9.22 times the normal volume for the stock at this time of day.
  • CALX is trading at a new high 4.32% 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 CALX:

Calix, Inc. develops, markets, and sells broadband communications access systems and software for fiber- and copper-based network architectures that enable communications service providers (CSPs) to transform their networks and connect to their residential and business subscribers. Currently there are 2 analysts that rate Calix a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Calix has been 325,600 shares per day over the past 30 days. Calix has a market cap of $391.1 million and is part of the technology sector and telecommunications industry. The stock has a beta of 0.41 and a short float of 2.2% with 1.50 days to cover. Shares are down 24.6% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Calix as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • CALX's revenue growth has slightly outpaced the industry average of 1.7%. Since the same quarter one year prior, revenues slightly increased by 6.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • CALX 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. To add to this, CALX has a quick ratio of 2.23, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for CALIX INC is rather high; currently it is at 51.69%. 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 -13.10% is in-line with the industry average.
  • Net operating cash flow has significantly decreased to -$11.90 million or 127.65% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • 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 Communications Equipment industry and the overall market, CALIX INC's return on equity significantly trails that of both the industry average and the S&P 500.

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