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

  • ERII has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $11.1 million.
  • ERII has traded 773,113 shares today.
  • ERII is trading at 10.22 times the normal volume for the stock at this time of day.
  • ERII is trading at a new high 13.07% 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 ERII:

Energy Recovery, Inc. designs, develops, and manufactures energy recovery devices (ERDs) to transform untapped energy into reusable energy from industrial fluid flows and pressure cycles. Currently there are no analysts that rate Energy Recovery a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Energy Recovery has been 853,500 shares per day over the past 30 days. Energy Recovery has a market cap of $391.2 million and is part of the industrial goods sector and industrial industry. The stock has a beta of 6.72 and a short float of 10.7% with 2.63 days to cover. Shares are up 40.8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Energy Recovery as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Machinery industry and the overall market, ENERGY RECOVERY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$6.97 million or 221.31% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • ENERGY RECOVERY INC has improved earnings per share by 33.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ENERGY RECOVERY INC reported poor results of -$0.36 versus -$0.07 in the prior year. This year, the market expects an improvement in earnings ($1.00 versus -$0.36).
  • The gross profit margin for ENERGY RECOVERY INC is rather high; currently it is at 61.71%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -31.73% is in-line with the industry average.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 27.8% when compared to the same quarter one year prior, rising from -$4.61 million to -$3.33 million.

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