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

  • JNPR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $132.7 million.
  • JNPR has traded 983,838 shares today.
  • JNPR is trading at 2.24 times the normal volume for the stock at this time of day.
  • JNPR is trading at a new low 3.02% 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 JNPR:

Juniper Networks, Inc. designs, develops, and sells high-performance network products and services worldwide. The stock currently has a dividend yield of 1.4%. Currently there are 8 analysts that rate Juniper Networks a buy, no analysts rate it a sell, and 16 rate it a hold.

The average volume for Juniper Networks has been 5.3 million shares per day over the past 30 days. Juniper has a market cap of $10.9 billion and is part of the technology sector and computer hardware industry. The stock has a beta of 0.84 and a short float of 3.2% with 1.86 days to cover. Shares are up 24.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Juniper Networks as a buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • Net operating cash flow has significantly increased by 74.04% to $219.30 million when compared to the same quarter last year. In addition, JUNIPER NETWORKS INC has also vastly surpassed the industry average cash flow growth rate of -73.33%.
  • The gross profit margin for JUNIPER NETWORKS INC is rather high; currently it is at 66.45%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.51% trails the industry average.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • Despite currently having a low debt-to-equity ratio of 0.42, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that JNPR's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.53 is high and demonstrates strong liquidity.
  • JUNIPER NETWORKS INC's earnings per share declined by 13.6% 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, JUNIPER NETWORKS INC swung to a loss, reporting -$0.90 versus $0.86 in the prior year. This year, the market expects an improvement in earnings ($1.68 versus -$0.90).

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