Tech Data (TECD) Is Today's Strong On High Volume Stock

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

  • TECD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $19.9 million.
  • TECD has traded 51,108 shares today.
  • TECD is trading at 7.63 times the normal volume for the stock at this time of day.
  • TECD is trading at a new high 7.17% 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 TECD:

Tech Data Corporation engages in the wholesale distribution of technology products. TECD has a PE ratio of 13. Currently there are 2 analysts that rate Tech Data a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Tech Data has been 362,500 shares per day over the past 30 days. Tech Data has a market cap of $2.2 billion and is part of the services sector and wholesale industry. The stock has a beta of 1.18 and a short float of 10.3% with 9.69 days to cover. Shares are down 3.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Tech Data as a buy. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Net operating cash flow has significantly increased by 56.71% to $177.36 million when compared to the same quarter last year. In addition, TECH DATA CORP has also vastly surpassed the industry average cash flow growth rate of -27.06%.
  • TECD's debt-to-equity ratio is very low at 0.19 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.91 is somewhat weak and could be cause for future problems.
  • TECH DATA CORP's earnings per share declined by 26.5% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, TECH DATA CORP reported lower earnings of $4.58 versus $4.71 in the prior year. This year, the market expects an improvement in earnings ($4.73 versus $4.58).
  • TECD, with its decline in revenue, slightly underperformed the industry average of 0.0%. Since the same quarter one year prior, revenues slightly dropped by 7.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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