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

  • VG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.0 million.
  • VG has traded 245,855 shares today.
  • VG is trading at 2.60 times the normal volume for the stock at this time of day.
  • VG is trading at a new high 5.05% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in VG with the Ticky from Trade-Ideas. See the FREE profile for VG NOW at Trade-Ideas

More details on VG:

Vonage Holdings Corp. provides unified communications as a service solutions connecting people through cloud-connected devices worldwide. VG has a PE ratio of 51. Currently there are 6 analysts that rate Vonage Holdings a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Vonage Holdings has been 1.8 million shares per day over the past 30 days. Vonage has a market cap of $1.2 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 0.38 and a short float of 3.3% with 4.02 days to cover. Shares are up 45.7% year-to-date as of the close of trading on Friday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE. Analysis:

TheStreet Quant Ratings rates Vonage Holdings as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and good cash flow from operations. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:
  • VG's revenue growth has slightly outpaced the industry average of 4.8%. Since the same quarter one year prior, revenues slightly increased by 1.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Telecommunication Services industry. The net income increased by 51.3% when compared to the same quarter one year prior, rising from $5.52 million to $8.35 million.
  • The current debt-to-equity ratio, 0.48, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that VG's debt-to-equity ratio is low, the quick ratio, which is currently 0.50, displays a potential problem in covering short-term cash needs.
  • The gross profit margin for VONAGE HOLDINGS CORP is rather high; currently it is at 67.35%. Regardless of VG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.76% 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. In comparison to the other companies in the Diversified Telecommunication Services industry and the overall market, VONAGE HOLDINGS CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.