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

  • STMP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $23.1 million.
  • STMP has traded 308,032 shares today.
  • STMP is trading at 61.15 times the normal volume for the stock at this time of day.
  • STMP is trading at a new high 28.13% 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 STMP:

Stamps.com Inc. provides Internet-based postage solutions in the United States. STMP has a PE ratio of 41. Currently there are 2 analysts that rate Stamps.com a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Stamps.com has been 260,200 shares per day over the past 30 days. Stamps.com has a market cap of $1.2 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 0.27 and a short float of 11.1% with 5.88 days to cover. Shares are up 58.3% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Stamps.com as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 13.7%. Since the same quarter one year prior, revenues rose by 41.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • STMP has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.22, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for STAMPS.COM INC is currently very high, coming in at 82.95%. 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 -21.56% is in-line with the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 193.3% when compared to the same quarter one year ago, falling from $11.17 million to -$10.43 million.
  • 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. When compared to other companies in the Internet Software & Services industry and the overall market, STAMPS.COM INC's return on equity is below that of both the industry average and the S&P 500.

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