SodaStream International (SODA) Flagged As Strong On High Volume

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

  • SODA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $10.2 million.
  • SODA has traded 185,615 shares today.
  • SODA is trading at 11.00 times the normal volume for the stock at this time of day.
  • SODA is trading at a new high 6.00% 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 SODA:

SodaStream International Ltd. develops, manufactures, and markets home beverage carbonation systems and related products. The company operates through four segments: The Americas; Western Europe; Asia-Pacific; and Central and Eastern Europe, Middle East, and Africa. SODA has a PE ratio of 19.3. Currently there is 1 analyst that rates SodaStream International a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for SodaStream International has been 540,100 shares per day over the past 30 days. SodaStream International has a market cap of $401.7 million and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 1.06 and a short float of 18% with 5.86 days to cover. Shares are down 5% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates SodaStream International as a hold. The company's strengths can be seen in multiple areas, such as its 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 a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • SODA's debt-to-equity ratio is very low at 0.13 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.37, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for SODASTREAM INTERNATIONAL LTD is rather high; currently it is at 54.32%. 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 -6.47% is in-line with the industry average.
  • The revenue fell significantly faster than the industry average of 6.5%. Since the same quarter one year prior, revenues fell by 24.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 Household Durables industry. The net income has significantly decreased by 1302.6% when compared to the same quarter one year ago, falling from $0.68 million to -$8.19 million.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 54.32%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1400.00% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, SODA is still more expensive than most of the other companies in its industry.

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