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

  • RENT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.1 million.
  • RENT has traded 149,630 shares today.
  • RENT is trading at 28.89 times the normal volume for the stock at this time of day.
  • RENT is trading at a new high 15.28% 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 RENT:

Rentrak Corporation operates as a media measurement and information company serving the entertainment, television, video, and advertising industries worldwide. Currently there are 3 analysts that rate Rentrak a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Rentrak has been 264,800 shares per day over the past 30 days. Rentrak has a market cap of $768.3 million and is part of the services sector and diversified services industry. The stock has a beta of -0.06 and a short float of 19.9% with 10.16 days to cover. Shares are down 30.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Rentrak as a hold. 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 and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 4.4%. Since the same quarter one year prior, revenues rose by 37.7%. 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.
  • RENT 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 this, the company maintains a quick ratio of 3.63, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for RENTRAK CORP is rather high; currently it is at 68.46%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -8.51% is in-line with the industry average.
  • Net operating cash flow has declined marginally to $4.70 million or 3.11% 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, 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 Media industry. The net income has significantly decreased by 568.7% when compared to the same quarter one year ago, falling from -$0.34 million to -$2.29 million.

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