Cadiz (CDZI): Today's Weak On High Volume Stock

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

  • CDZI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.5 million.
  • CDZI has traded 74,554 shares today.
  • CDZI is trading at 3.95 times the normal volume for the stock at this time of day.
  • CDZI is trading at a new low 3.44% 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 CDZI:

Cadiz Inc. operates as a land and water resource development company in the United States. It engages in the water resource, and land and agricultural development activities in San Bernardino County properties.

The average volume for Cadiz has been 257,300 shares per day over the past 30 days. Cadiz has a market cap of $61.8 million and is part of the utilities sector and utilities industry. The stock has a beta of 1.83 and a short float of 27.8% with 3.34 days to cover. Shares are down 66.2% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Cadiz as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Water Utilities industry average. The net income has significantly decreased by 32.7% when compared to the same quarter one year ago, falling from -$4.52 million to -$5.99 million.
  • Net operating cash flow has decreased to -$2.71 million or 27.74% 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.
  • Looking at the price performance of CDZI's shares over the past 12 months, there is not much good news to report: the stock is down 68.31%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • CADIZ INC's earnings per share declined by 21.4% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, CADIZ INC continued to lose money by earning -$1.15 versus -$1.46 in the prior year.
  • The gross profit margin for CADIZ INC is currently very high, coming in at 100.00%. CDZI has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, CDZI's net profit margin of -15763.15% significantly underperformed when compared to the industry average.

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