InterCloud Systems (ICLD) Stock: Weak On High 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 InterCloud Systems ( ICLD) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified InterCloud Systems as such a stock due to the following factors:

  • ICLD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $49.3 million.
  • ICLD has traded 515,569 shares today.
  • ICLD is trading at 2.35 times the normal volume for the stock at this time of day.
  • ICLD is trading at a new low 7.22% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in ICLD with the Ticky from Trade-Ideas. See the FREE profile for ICLD NOW at Trade-Ideas

More details on ICLD:

InterCloud Systems, Inc. provides end-to-end IT and network solutions to the telecommunications service provider and corporate enterprise markets through cloud platforms and professional services in the United States and internationally.

The average volume for InterCloud Systems has been 2.4 million shares per day over the past 30 days. InterCloud Systems has a market cap of $76.6 million and is part of the technology sector and computer software & services industry. The stock has a beta of 4.94 and a short float of 4.3% with 0.03 days to cover. Shares are up 34.9% year-to-date as of the close of trading on Thursday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates InterCloud Systems as a sell. The company's weaknesses can be seen in multiple areas, such as its poor profit margins, weak operating cash flow, generally disappointing historical performance in the stock itself and generally high debt management risk.

Highlights from the ratings report include:
  • The gross profit margin for INTERCLOUD SYSTEMS INC is rather low; currently it is at 21.32%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -28.79% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$1.38 million or 206.32% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite the current debt-to-equity ratio of 1.52, it is still below the industry average, suggesting that this level of debt is acceptable within the IT Services industry. Despite the fact that ICLD's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.60 is low and demonstrates weak liquidity.
  • ICLD'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 62.66%, 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. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • Compared to other companies in the IT Services industry and the overall market, INTERCLOUD SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

More from Markets

Stocks Rise Sharply, Facebook Ignites a Nasdaq Rally

Stocks Rise Sharply, Facebook Ignites a Nasdaq Rally

Jim Cramer: Visa Is a Technology Company That Masquerades as a Financial Company

Jim Cramer: Visa Is a Technology Company That Masquerades as a Financial Company

Jim Cramer: Chipotle Shares Are Probably Done Going Down

Jim Cramer: Chipotle Shares Are Probably Done Going Down

Jim Cramer: This Is a Sad Time for Southwest Airlines

Jim Cramer: This Is a Sad Time for Southwest Airlines

Jim Cramer Just Spoke to Larry Kudlow About the China Trade Negotiations

Jim Cramer Just Spoke to Larry Kudlow About the China Trade Negotiations