Trade-Ideas: NTELOS Holdings (NTLS) Is Today's Weak On High Relative 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 NTELOS Holdings ( NTLS) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified NTELOS Holdings as such a stock due to the following factors:

  • NTLS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.8 million.
  • NTLS has traded 327,409 shares today.
  • NTLS is trading at 16.43 times the normal volume for the stock at this time of day.
  • NTLS is trading at a new low 4.08% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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 NTLS:

NTELOS Holdings Corp., through its subsidiaries, provides digital wireless communications services. The company offers wireless voice and digital data personal communication products and services primarily to retail and business customers under the NTELOS Wireless and FRAWG Wireless brands. The stock currently has a dividend yield of 42.2%. Currently there are 2 analysts that rate NTELOS Holdings a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for NTELOS Holdings has been 478,500 shares per day over the past 30 days. NTELOS has a market cap of $137.6 million and is part of the technology sector and telecommunications industry. Shares are up 48% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates NTELOS Holdings as a sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and poor profit margins.

Highlights from the ratings report include:
  • NTLS's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 57.40%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • The gross profit margin for NTELOS HOLDINGS CORP is currently lower than what is desirable, coming in at 28.00%. Regardless of NTLS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 12.30% trails the industry average.
  • The revenue fell significantly faster than the industry average of 67.0%. Since the same quarter one year prior, revenues slightly dropped by 1.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • NTELOS HOLDINGS CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NTELOS HOLDINGS CORP swung to a loss, reporting -$2.54 versus $1.12 in the prior year. This year, the market expects an improvement in earnings (-$0.97 versus -$2.54).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Wireless Telecommunication Services industry. The net income increased by 1050.5% when compared to the same quarter one year prior, rising from $1.29 million to $14.80 million.

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