Strong On High Volume: Acxiom (ACXM)

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

  • ACXM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.7 million.
  • ACXM has traded 87,895 shares today.
  • ACXM is trading at 6.17 times the normal volume for the stock at this time of day.
  • ACXM is trading at a new high 3.08% 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 ACXM:

Acxiom Corporation operates as an enterprise data, analytics, and software-as-a-service company in the United States, Europe, South America, and the Asia-Pacific. The company operates in three segments: Marketing and Data Services, IT Infrastructure Management, and Other Services. Currently there are 3 analysts that rate Acxiom a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Acxiom has been 331,100 shares per day over the past 30 days. Acxiom has a market cap of $1.4 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.60 and a short float of 4.1% with 6.73 days to cover. Shares are down 18.2% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Acxiom as a hold. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.43, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.34, which illustrates the ability to avoid short-term cash problems.
  • Despite the weak revenue results, ACXM has outperformed against the industry average of 22.5%. Since the same quarter one year prior, revenues slightly dropped by 3.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • ACXIOM CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ACXIOM CORP reported lower earnings of $0.10 versus $0.75 in the prior year. This year, the market expects an improvement in earnings ($0.76 versus $0.10).
  • The gross profit margin for ACXIOM CORP is currently lower than what is desirable, coming in at 33.02%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.59% significantly trails the industry average.
  • Net operating cash flow has decreased to $42.80 million or 32.87% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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