IntraLinks Holdings (IL) Is Today's Strong On High 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 IntraLinks Holdings ( IL) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified IntraLinks Holdings as such a stock due to the following factors:

  • IL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.7 million.
  • IL has traded 83,629 shares today.
  • IL is trading at 3.38 times the normal volume for the stock at this time of day.
  • IL is trading at a new high 4.09% 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 IL:

IntraLinks Holdings, Inc. provides software-as-a-service (SaaS) solutions for secure enterprise content collaboration within and among organizations in the United States and internationally. Currently there are 3 analysts that rate IntraLinks Holdings a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for IntraLinks Holdings has been 261,100 shares per day over the past 30 days. IntraLinks has a market cap of $629.3 million and is part of the technology sector and computer software & services industry. The stock has a beta of 2.62 and a short float of 2.5% with 4.13 days to cover. Shares are down 9.5% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates IntraLinks Holdings as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • IL's revenue growth has slightly outpaced the industry average of 5.8%. Since the same quarter one year prior, revenues rose by 11.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Although IL's debt-to-equity ratio of 0.27 is very low, it is currently higher than that of the industry average. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.24, which illustrates the ability to avoid short-term cash problems.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Internet Software & Services industry and the overall market, INTRALINKS HOLDINGS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$8.17 million or 160.42% 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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