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

  • IDCC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $22.2 million.
  • IDCC has traded 93,864 shares today.
  • IDCC is trading at 7.74 times the normal volume for the stock at this time of day.
  • IDCC is trading at a new high 5.08% 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 IDCC:

InterDigital, Inc. designs and develops technologies that enable and enhance wireless communications in the United States and internationally. The stock currently has a dividend yield of 1.4%. IDCC has a PE ratio of 17. Currently there is 1 analyst that rates InterDigital a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for InterDigital has been 397,600 shares per day over the past 30 days. InterDigital has a market cap of $2.1 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 1.25 and a short float of 11.4% with 10.94 days to cover. Shares are up 6.5% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates InterDigital as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, notable return on equity, compelling growth in net income and good cash flow from operations. 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:
  • IDCC's very impressive revenue growth greatly exceeded the industry average of 0.9%. Since the same quarter one year prior, revenues leaped by 90.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 1660.00% and other important driving factors, this stock has surged by 31.25% 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, IDCC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Communications Equipment industry and the overall market, INTERDIGITAL INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 1661.8% when compared to the same quarter one year prior, rising from -$1.86 million to $29.07 million.
  • Net operating cash flow has significantly increased by 161.94% to $1.77 million when compared to the same quarter last year. In addition, INTERDIGITAL INC has also vastly surpassed the industry average cash flow growth rate of -73.47%.

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