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

  • HEI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.8 million.
  • HEI has traded 63,080 shares today.
  • HEI is trading at 10.11 times the normal volume for the stock at this time of day.
  • HEI is trading at a new low 3.02% 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 HEI:

HEICO Corporation, through its subsidiaries, designs, manufactures, and sells aerospace, defense, and electronic related products and services in the United States and internationally. The stock currently has a dividend yield of 0.3%. HEI has a PE ratio of 28. Currently there are 5 analysts that rate Heico a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Heico has been 237,100 shares per day over the past 30 days. Heico has a market cap of $1.4 billion and is part of the industrial goods sector and aerospace/defense industry. The stock has a beta of 0.76 and a short float of 6.8% with 5.66 days to cover. Shares are down 16% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Heico as a buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • HEICO CORP has improved earnings per share by 16.7% 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. During the past fiscal year, HEICO CORP increased its bottom line by earning $1.80 versus $1.52 in the prior year. This year, the market expects an improvement in earnings ($3.95 versus $1.80).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Aerospace & Defense industry. The net income increased by 16.7% when compared to the same quarter one year prior, going from $28.37 million to $33.11 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 4.9%. Since the same quarter one year prior, revenues slightly increased by 3.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.44, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.23, which illustrates the ability to avoid short-term cash problems.
  • 40.40% is the gross profit margin for HEICO CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 11.35% is above that of the industry average.

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