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

  • HOLI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.1 million.
  • HOLI has traded 171,988 shares today.
  • HOLI is trading at 9.02 times the normal volume for the stock at this time of day.
  • HOLI is trading at a new high 4.16% 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 HOLI:

Hollysys Automation Technologies Ltd. The stock currently has a dividend yield of 1.7%. HOLI has a PE ratio of 27. Currently there are 2 analysts that rate Hollysys Automation Technologies a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Hollysys Automation Technologies has been 662,600 shares per day over the past 30 days. Hollysys Automation has a market cap of $1.3 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 0.87 and a short float of 3.3% with 3.43 days to cover. Shares are up 2.4% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Hollysys Automation Technologies as a buy. 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, notable return on equity, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.1%. Since the same quarter one year prior, revenues rose by 23.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • HOLI's debt-to-equity ratio is very low at 0.10 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, HOLI has a quick ratio of 1.88, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, HOLLYSYS AUTOMATION TECH LTD's return on equity exceeds that of both the industry average and the S&P 500.
  • 47.69% is the gross profit margin for HOLLYSYS AUTOMATION TECH LTD which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 26.76% significantly outperformed against the industry average.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

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