Strong On High Relative Volume: Wix.com (WIX)

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

  • WIX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.0 million.
  • WIX has traded 66,214 shares today.
  • WIX is trading at 4.40 times the normal volume for the stock at this time of day.
  • WIX is trading at a new high 3.10% 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 WIX:

Wix.com Ltd. develops and markets an Internet service that allows users to create Web content. Currently there are 7 analysts that rate Wix.com a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Wix.com has been 242,600 shares per day over the past 30 days. Wix.com has a market cap of $910.6 million and is part of the technology sector and internet industry. Shares are up 13.6% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Wix.com as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and deteriorating net income.

Highlights from the ratings report include:
  • Net operating cash flow has significantly decreased to -$0.58 million or 152.96% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Internet Software & Services industry average. The net income has decreased by 7.4% when compared to the same quarter one year ago, dropping from -$14.92 million to -$16.03 million.
  • WIX.COM LTD' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, WIX.COM LTD reported poor results of -$1.50 versus -$0.51 in the prior year. This year, the market expects an improvement in earnings (-$0.84 versus -$1.50).
  • WIX 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. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.86 is somewhat weak and could be cause for future problems.
  • Compared to other companies in the Internet Software & Services industry and the overall market, WIX.COM LTD's return on equity significantly trails that of both the industry average and the S&P 500.

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