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

  • LNN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.0 million.
  • LNN has traded 55,851 shares today.
  • LNN is trading at 10.26 times the normal volume for the stock at this time of day.
  • LNN is trading at a new high 9.05% 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 LNN:

Lindsay Corporation provides proprietary water management and road infrastructure products and services in the United States and internationally. The stock currently has a dividend yield of 1.3%. LNN has a PE ratio of 24. Currently there are no analysts that rate Lindsay a buy, 2 analysts rate it a sell, and 7 rate it a hold.

The average volume for Lindsay has been 124,100 shares per day over the past 30 days. Lindsay has a market cap of $997.4 million and is part of the industrial goods sector and industrial industry. The stock has a beta of 0.80 and a short float of 40.7% with 29.36 days to cover. Shares are down 1.5% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Lindsay as a buy. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, LNN has a quick ratio of 2.38, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 11.3%. Since the same quarter one year prior, revenues slightly dropped by 7.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for LINDSAY CORP is currently lower than what is desirable, coming in at 31.06%. Regardless of LNN's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.37% trails the industry average.
  • Net operating cash flow has significantly decreased to $9.89 million or 62.70% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • 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. When compared to other companies in the Machinery industry and the overall market, LINDSAY CORP's return on equity is below that of both the industry average and the S&P 500.

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