Pennant Park Investment Corporation (PNNT) Strong On High Relative Volume Today

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

  • PNNT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.1 million.
  • PNNT has traded 104,913 shares today.
  • PNNT is trading at 3.75 times the normal volume for the stock at this time of day.
  • PNNT is trading at a new high 3.09% 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 PNNT:

PennantPark Investment Corporation is a publicly listed business development firm specializing in direct and mezzanine investments in middle market companies. It invests in the form of mezzanine debt, senior secured loans, and equity investments. The stock currently has a dividend yield of 12.1%. PNNT has a PE ratio of 5.6. Currently there are 5 analysts that rate Pennant Park Investment Corporation a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Pennant Park Investment Corporation has been 389,400 shares per day over the past 30 days. Pennant Park Investment has a market cap of $695.4 million and is part of the financial sector and financial services industry. The stock has a beta of 1.24 and a short float of 1.7% with 3.06 days to cover. Shares are down 2.8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Pennant Park Investment Corporation as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • PNNT's revenue growth has slightly outpaced the industry average of 4.4%. Since the same quarter one year prior, revenues rose by 13.8%. 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.
  • The gross profit margin for PENNANTPARK INVESTMENT CORP is rather high; currently it is at 66.30%. 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 -61.07% is in-line with the industry average.
  • Net operating cash flow has increased to -$61.84 million or 40.57% when compared to the same quarter last year. Despite an increase in cash flow of 40.57%, PENNANTPARK INVESTMENT CORP is still growing at a significantly lower rate than the industry average of 141.93%.
  • 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 Capital Markets industry. The net income has significantly decreased by 160.7% when compared to the same quarter one year ago, falling from $39.46 million to -$23.95 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Capital Markets industry and the overall market, PENNANTPARK INVESTMENT CORP's return on equity is below that of both the industry average and the S&P 500.

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