SBA Communications (SBAC) Strong On High Relative 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 SBA Communications ( SBAC) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified SBA Communications as such a stock due to the following factors:

  • SBAC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $140.8 million.
  • SBAC has traded 483,074 shares today.
  • SBAC is trading at 17.66 times the normal volume for the stock at this time of day.
  • SBAC is trading at a new high 5.04% 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 SBAC:

SBA Communications Corporation owns and operates wireless communications tower structures, rooftops, and other structures that support antennas used for wireless communications in the United States and its territories, Canada, Central America, and Brazil. Currently there are 11 analysts that rate SBA Communications a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for SBA Communications has been 912,100 shares per day over the past 30 days. SBA has a market cap of $14.9 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 0.45 and a short float of 1.5% with 1.86 days to cover. Shares are up 3.1% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates SBA Communications as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • The revenue growth significantly trails the industry average of 56.3%. Since the same quarter one year prior, revenues rose by 18.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The gross profit margin for SBA COMMUNICATIONS CORP is currently very high, coming in at 72.91%. 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 -19.27% is in-line with 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. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • Net operating cash flow has declined marginally to $178.41 million or 0.31% when compared to the same quarter last year. Despite a decrease in cash flow SBA COMMUNICATIONS CORP is still fairing well by exceeding its industry average cash flow growth rate of -37.17%.
  • 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 Wireless Telecommunication Services industry. The net income has significantly decreased by 5716.9% when compared to the same quarter one year ago, falling from $1.41 million to -$79.03 million.

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