Trade-Ideas: Net 1 Ueps Technologies (UEPS) Is Today's Strong On High Relative 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 Net 1 Ueps Technologies ( UEPS) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Net 1 Ueps Technologies as such a stock due to the following factors:

  • UEPS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.9 million.
  • UEPS has traded 52,184 shares today.
  • UEPS is trading at 2.49 times the normal volume for the stock at this time of day.
  • UEPS is trading at a new high 3.10% 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 UEPS:

Net 1 UEPS Technologies, Inc. provides payment solutions and transaction processing services for various industries in South Africa, Korea, Europe, and internationally. UEPS has a PE ratio of 7. Currently there is 1 analyst that rates Net 1 Ueps Technologies a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Net 1 Ueps Technologies has been 162,900 shares per day over the past 30 days. Net 1 Ueps has a market cap of $671.6 million and is part of the services sector and diversified services industry. The stock has a beta of 0.59 and a short float of 1.6% with 1.10 days to cover. Shares are up 27.2% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Net 1 Ueps Technologies as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 22.5%. Since the same quarter one year prior, revenues rose by 12.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 71.42% and other important driving factors, this stock has surged by 30.17% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, UEPS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • NET 1 UEPS TECHNOLOGIES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, NET 1 UEPS TECHNOLOGIES INC increased its bottom line by earning $1.48 versus $0.29 in the prior year. This year, the market expects an improvement in earnings ($2.20 versus $1.48).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 75.5% when compared to the same quarter one year prior, rising from $12.75 million to $22.37 million.

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