KEYW (KEYW) Weak On High Volume

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

  • KEYW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.4 million.
  • KEYW has traded 52,499 shares today.
  • KEYW is trading at 3.28 times the normal volume for the stock at this time of day.
  • KEYW is trading at a new low 4.14% 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 KEYW:

The KEYW Holding Corporation, through its subsidiaries, provides mission-critical cybersecurity, cyber superiority, and geospatial intelligence solutions in the United States. The company operates through Government Solutions and Commercial Cyber Solutions segments. Currently there are 4 analysts that rate KEYW a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for KEYW has been 444,700 shares per day over the past 30 days. KEYW has a market cap of $416.2 million and is part of the technology sector and computer software & services industry. The stock has a beta of 0.78 and a short float of 41.4% with 16.64 days to cover. Shares are up 4.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates KEYW as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • KEYW HOLDING CORP 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, KEYW HOLDING CORP reported poor results of -$0.34 versus -$0.28 in the prior year. For the next year, the market is expecting a contraction of 20.6% in earnings (-$0.41 versus -$0.34).
  • 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 Aerospace & Defense industry. The net income has significantly decreased by 98.4% when compared to the same quarter one year ago, falling from -$3.08 million to -$6.10 million.
  • 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. Compared to other companies in the Aerospace & Defense industry and the overall market, KEYW HOLDING CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for KEYW HOLDING CORP is currently lower than what is desirable, coming in at 33.49%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -8.51% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$5.15 million or 209.93% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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