Weak On High Volume: Monster Worldwide (MWW)

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 Monster Worldwide ( MWW) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Monster Worldwide as such a stock due to the following factors:

  • MWW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.2 million.
  • MWW has traded 75,848 shares today.
  • MWW is trading at 2.47 times the normal volume for the stock at this time of day.
  • MWW is trading at a new low 3.01% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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 MWW:

Monster Worldwide, Inc., together with its subsidiaries, provides online and mobile employment solutions worldwide. The company operates in three segments: Careers-North America, Careers-International, and Internet Advertising & Fees. Currently there are 2 analysts that rate Monster Worldwide a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Monster Worldwide has been 1.4 million shares per day over the past 30 days. Monster Worldwide has a market cap of $560.6 million and is part of the services sector and diversified services industry. The stock has a beta of 3.00 and a short float of 32.1% with 20.70 days to cover. Shares are up 36.6% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Monster Worldwide as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Internet Software & Services industry and the overall market, MONSTER WORLDWIDE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for MONSTER WORLDWIDE INC is currently extremely low, coming in at 12.28%. Regardless of MWW's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, MWW's net profit margin of 4.44% is significantly lower than the industry average.
  • In its most recent trading session, MWW has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • MWW, with its decline in revenue, underperformed when compared the industry average of 5.8%. Since the same quarter one year prior, revenues slightly dropped by 7.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Despite currently having a low debt-to-equity ratio of 0.44, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.81 is weak.

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