Strong On High Relative Volume: Bsquare (BSQR)

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

  • BSQR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.6 million.
  • BSQR has traded 142,619 shares today.
  • BSQR is trading at 32.25 times the normal volume for the stock at this time of day.
  • BSQR 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 BSQR:

BSQUARE Corporation provides software solutions and related engineering services to companies that develop connected systems in North America, Asia, and Europe. BSQR has a PE ratio of 2.

The average volume for Bsquare has been 32,800 shares per day over the past 30 days. Bsquare has a market cap of $48.3 million and is part of the technology sector and computer software & services industry. The stock has a beta of 1.50 and a short float of 0.2% with 0.05 days to cover. Shares are up 20.9% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Bsquare as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:
  • This stock has managed to rise its share value by 27.01% over the past twelve months. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • BSQUARE CORP has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, BSQUARE CORP turned its bottom line around by earning $0.21 versus -$0.47 in the prior year.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 1.5%. Since the same quarter one year prior, revenues slightly dropped by 0.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Software industry and the overall market, BSQUARE CORP's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for BSQUARE CORP is rather low; currently it is at 19.18%. Regardless of BSQR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, BSQR's net profit margin of 5.45% is significantly lower than the industry average.

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