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

  • UTIW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $11.6 million.
  • UTIW has traded 301,010 shares today.
  • UTIW is trading at 7.53 times the normal volume for the stock at this time of day.
  • UTIW is trading at a new high 3.01% 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.

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More details on UTIW:

UTi Worldwide Inc. operates as a non-asset-based supply chain services and solutions company. It operates through two segments, Freight Forwarding, and Contract Logistics and Distribution. Currently there is 1 analyst that rates UTi Worldwide a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for UTi Worldwide has been 1.4 million shares per day over the past 30 days. UTi Worldwide has a market cap of $1.1 billion and is part of the services sector and transportation industry. The stock has a beta of 0.03 and a short float of 21.9% with 15.60 days to cover. Shares are down 17.3% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates UTi Worldwide 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 Air Freight & Logistics industry. The net income has significantly decreased by 104.8% when compared to the same quarter one year ago, falling from -$50.72 million to -$103.88 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 Air Freight & Logistics industry and the overall market, UTI WORLDWIDE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for UTI WORLDWIDE INC is currently lower than what is desirable, coming in at 32.36%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -10.76% is significantly below that of the industry average.
  • In its most recent trading session, UTIW has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • UTI WORLDWIDE 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 year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, UTI WORLDWIDE INC reported poor results of -$2.04 versus -$0.73 in the prior year. This year, the market expects an improvement in earnings (-$0.12 versus -$2.04).

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