New Media Investment Group (NEWM) Is 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 New Media Investment Group ( NEWM) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified New Media Investment Group as such a stock due to the following factors:

  • NEWM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.9 million.
  • NEWM has traded 60,278 shares today.
  • NEWM is trading at 6.59 times the normal volume for the stock at this time of day.
  • NEWM is trading at a new low 3.20% 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 NEWM:

New Media Investment Group Inc. owns, operates, and invests in local media assets in the United States. The stock currently has a dividend yield of 5.9%. Currently there are 2 analysts that rate New Media Investment Group a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for New Media Investment Group has been 266,800 shares per day over the past 30 days. New Media Investment Group has a market cap of $1.0 billion and is part of the services sector and media industry. Shares are down 10.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates New Media Investment Group as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good.

Highlights from the ratings report include:
  • NEWM's very impressive revenue growth greatly exceeded the industry average of 3.8%. Since the same quarter one year prior, revenues leaped by 76.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.59, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.01, which illustrates the ability to avoid short-term cash problems.
  • 43.85% is the gross profit margin for NEW MEDIA INVESTMENT GROUP which we consider to be strong. 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 -2.42% is in-line with the industry average.
  • NEW MEDIA INVESTMENT GROUP has improved earnings per share by 36.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NEW MEDIA INVESTMENT GROUP swung to a loss, reporting -$0.17 versus $31.83 in the prior year. This year, the market expects an improvement in earnings ($0.93 versus -$0.17).
  • Compared to other companies in the Media industry and the overall market on the basis of return on equity, NEW MEDIA INVESTMENT GROUP underperformed against that of the industry average and is significantly less than that of the S&P 500.

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