Strong On High Relative Volume: Lightbridge (LTBR)

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

  • LTBR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.7 million.
  • LTBR has traded 165,174 shares today.
  • LTBR is trading at 9.90 times the normal volume for the stock at this time of day.
  • LTBR is trading at a new high 5.59% 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 LTBR:

Lightbridge Corporation operates as a nuclear fuel technology company worldwide. It operates in two segments, Technology and Consulting. The company engages in the design and development of proprietary nuclear fuels.

The average volume for Lightbridge has been 318,300 shares per day over the past 30 days. Lightbridge has a market cap of $28.8 million and is part of the basic materials sector and chemicals industry. Shares are down 7.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Lightbridge as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • Net operating cash flow has decreased to -$0.88 million or 40.44% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • LTBR'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 43.52%, 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.
  • 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 Professional Services industry and the overall market, LIGHTBRIDGE CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • 38.89% is the gross profit margin for LIGHTBRIDGE CORP which we consider to be strong. Regardless of LTBR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LTBR's net profit margin of -223.84% significantly underperformed when compared to the industry average.
  • LTBR, with its decline in revenue, underperformed when compared the industry average of 1.3%. Since the same quarter one year prior, revenues fell by 22.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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