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

  • SNDK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $168.3 million.
  • SNDK has traded 741,245 shares today.
  • SNDK is trading at 5.63 times the normal volume for the stock at this time of day.
  • SNDK is trading at a new low 4.01% 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 SNDK:

SanDisk Corporation designs, develops, manufactures, and markets data storage solutions in the United States and internationally. The stock currently has a dividend yield of 1.8%. SNDK has a PE ratio of 2. Currently there are 11 analysts that rate SanDisk a buy, no analysts rate it a sell, and 10 rate it a hold.

The average volume for SanDisk has been 4.5 million shares per day over the past 30 days. SanDisk has a market cap of $13.9 billion and is part of the technology sector and computer hardware industry. The stock has a beta of 2.08 and a short float of 8.1% with 6.38 days to cover. Shares are down 32.5% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates SanDisk as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The revenue fell significantly faster than the industry average of 33.3%. Since the same quarter one year prior, revenues fell by 11.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Despite currently having a low debt-to-equity ratio of 0.35, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.35 is sturdy.
  • 47.95% is the gross profit margin for SANDISK CORP which we consider to be strong. Regardless of SNDK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SNDK's net profit margin of 2.92% is significantly lower than the industry average.
  • Net operating cash flow has decreased to $308.87 million or 19.16% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Computers & Peripherals industry and the overall market, SANDISK CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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