Web.com Group (WWWW) Is Weak On High Volume Today

Trade-Ideas LLC identified Web.com Group ( WWWW) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Web.com Group as such a stock due to the following factors:

  • WWWW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.4 million.
  • WWWW has traded 162,544 shares today.
  • WWWW is trading at 9.85 times the normal volume for the stock at this time of day.
  • WWWW is trading at a new low 12.03% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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 WWWW:

Web.com Group, Inc. provides Internet services to small businesses in North America, South America, and the United Kingdom. The company offers a range of Web services and products that enable small businesses to establish, maintain, promote, and optimize their online presence. Currently there are 8 analysts that rate Web.com Group a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Web.com Group has been 506,400 shares per day over the past 30 days. Web.com Group has a market cap of $1.2 billion and is part of the technology sector and internet industry. The stock has a beta of 0.19 and a short float of 6.5% with 4.94 days to cover. Shares are up 25.2% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Web.com Group as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:
  • 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. Although other factors naturally played a role, the company's strong earnings growth was key. 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.
  • WEB.COM GROUP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, WEB.COM GROUP INC continued to lose money by earning -$0.25 versus -$1.36 in the prior year. This year, the market expects an improvement in earnings ($2.40 versus -$0.25).
  • The gross profit margin for WEB.COM GROUP INC is rather high; currently it is at 65.29%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, WWWW's net profit margin of 3.35% significantly trails the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, WEB.COM GROUP INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The debt-to-equity ratio is very high at 2.85 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.11, which clearly demonstrates the inability to cover short-term cash needs.

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