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

  • SSNI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.9 million.
  • SSNI has traded 72,047 shares today.
  • SSNI is trading at 5.33 times the normal volume for the stock at this time of day.
  • SSNI is trading at a new high 6.01% 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 SSNI:

Silver Spring Networks, Inc. provides networking platform and solutions that enable utilities to transform the power grid infrastructure into the smart grid. The company's networking platform provides two-way communication between the utility back office and devices on the power grid. Currently there are 4 analysts that rate Silver Spring Networks a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Silver Spring Networks has been 277,000 shares per day over the past 30 days. Silver Spring has a market cap of $675.4 million and is part of the technology sector and computer hardware industry. The stock has a beta of 3.07 and a short float of 7.9% with 6.40 days to cover. Shares are up 63.8% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Silver Spring Networks as a sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • In its most recent trading session, SSNI has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • SILVER SPRING NETWORKS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SILVER SPRING NETWORKS INC reported poor results of -$1.85 versus -$1.47 in the prior year. This year, the market expects an improvement in earnings (-$0.05 versus -$1.85).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 225.5% when compared to the same quarter one year prior, rising from -$27.81 million to $34.91 million.
  • The gross profit margin for SILVER SPRING NETWORKS INC is rather high; currently it is at 51.01%. It has increased significantly from the same period last year. Along with this, the net profit margin of 24.30% is above that of the industry average.
  • Net operating cash flow has significantly increased by 86.04% to -$0.46 million when compared to the same quarter last year. In addition, SILVER SPRING NETWORKS INC has also vastly surpassed the industry average cash flow growth rate of -16.29%.

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