Voltari (VLTC) Is Today's Perilous Reversal 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 Voltari ( VLTC) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Voltari as such a stock due to the following factors:

  • VLTC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $17.2 million.
  • VLTC has traded 56,259 shares today.
  • VLTC is down 3% today.
  • VLTC was up 12.8% yesterday.

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More details on VLTC:

Voltari Corporation, together with its subsidiaries, provides relevance-driven merchandising, digital marketing, and advertising solutions, primarily over smartphones and other mobile devices to brands, marketers, and advertising agencies. It also offers predictive analytics services.

The average volume for Voltari has been 4.1 million shares per day over the past 30 days. Voltari has a market cap of $60.8 million and is part of the technology sector and telecommunications industry. The stock has a beta of -5.20 and a short float of 18.7% with 0.63 days to cover. Shares are up 916.7% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Voltari as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • 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 Software industry and the overall market, VOLTARI CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for VOLTARI CORP is currently extremely low, coming in at 3.72%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, VLTC's net profit margin of -141.06% significantly underperformed when compared to the industry average.
  • VOLTARI CORP has improved earnings per share by 34.8% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, VOLTARI CORP reported poor results of -$7.17 versus -$6.49 in the prior year.
  • VLTC, with its decline in revenue, slightly underperformed the industry average of 5.0%. Since the same quarter one year prior, revenues fell by 11.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • VLTC has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.57, which clearly demonstrates the ability to cover short-term cash needs.

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