WidePoint (WYY) Is Strong 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 WidePoint ( WYY) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified WidePoint as such a stock due to the following factors:

  • WYY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.5 million.
  • WYY has traded 300,200 shares today.
  • WYY is trading at 6.14 times the normal volume for the stock at this time of day.
  • WYY is trading at a new high 3.05% 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 WYY:

WidePoint Corporation provides information technology (IT) based products, services, and solutions worldwide. Currently there are 2 analysts that rate WidePoint a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for WidePoint has been 372,500 shares per day over the past 30 days. WidePoint has a market cap of $148.7 million and is part of the technology sector and computer software & services industry. The stock has a beta of -0.33 and a short float of 1.9% with 1.00 days to cover. Shares are up 31.2% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

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

Highlights from the ratings report include:
  • WYY's very impressive revenue growth greatly exceeded the industry average of 22.5%. Since the same quarter one year prior, revenues leaped by 84.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • WYY's debt-to-equity ratio is very low at 0.10 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, WYY has a quick ratio of 1.66, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of 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.
  • The gross profit margin for WIDEPOINT CORP is rather low; currently it is at 21.85%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -6.54% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$1.29 million or 2333.96% 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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