Geeknet (GKNT) Is Strong On High Volume Today

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

  • GKNT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.4 million.
  • GKNT has traded 101,255 shares today.
  • GKNT is trading at 41.78 times the normal volume for the stock at this time of day.
  • GKNT is trading at a new high 5.01% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in GKNT with the Ticky from Trade-Ideas. See the FREE profile for GKNT NOW at Trade-Ideas

More details on GKNT:

Geeknet, Inc., through its subsidiaries, operates as an online retailer for the global geek community in the United States. It operates through two segments, Website and Wholesale.

The average volume for Geeknet has been 64,900 shares per day over the past 30 days. Geeknet has a market cap of $125.4 million and is part of the services sector and specialty retail industry. The stock has a beta of -0.97 and a short float of 0.7% with 0.09 days to cover. Shares are up 128.9% year-to-date as of the close of trading on Thursday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Geeknet as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet & Catalog Retail industry. The net income has significantly decreased by 80.9% when compared to the same quarter one year ago, falling from $5.07 million to $0.97 million.
  • 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 & Catalog Retail industry and the overall market, GEEKNET INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for GEEKNET INC is rather low; currently it is at 18.09%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 1.33% is above that of the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 39.68%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 81.57% compared to the year-earlier 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.
  • GEEKNET INC 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, GEEKNET INC reported poor results of -$1.24 versus -$0.03 in the prior year. This year, the market expects an improvement in earnings (-$1.19 versus -$1.24).

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

If you liked this article you might like

Stocks Pare Losses; Intel Drags on Dow After Being Downgraded

Stocks Pare Losses; Intel Drags on Dow After Being Downgraded

Geeknet Attracts Mystery Bidder Following Hot Topic Offer

Geeknet Attracts Mystery Bidder Following Hot Topic Offer

GeekNet (GKNT) Stock Doubles Following $122 Million Acquisition by Hot Topic

GeekNet (GKNT) Stock Doubles Following $122 Million Acquisition by Hot Topic

Zulily and 7 Other Internet Retailer Stocks to Sell Right Now

Zulily and 7 Other Internet Retailer Stocks to Sell Right Now