Strong On High Volume: Black Diamond (BDE)

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

  • BDE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.0 million.
  • BDE has traded 173,126 shares today.
  • BDE is trading at 15.76 times the normal volume for the stock at this time of day.
  • BDE is trading at a new high 7.11% 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 BDE:

Black Diamond, Inc., together with its subsidiaries, designs, manufactures, and markets outdoor performance equipment and apparel for climbing, mountaineering, backpacking, skiing, cycling, and other outdoor recreation activities in the United States and internationally. Currently there are 3 analysts that rate Black Diamond a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Black Diamond has been 318,900 shares per day over the past 30 days. Black has a market cap of $130.8 million and is part of the consumer goods sector and consumer durables industry. The stock has a beta of 1.74 and a short float of 6.9% with 2.35 days to cover. Shares are down 51.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Black Diamond as a sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and unimpressive growth in net income.

Highlights from the ratings report include:
  • Looking at the price performance of BDE's shares over the past 12 months, there is not much good news to report: the stock is down 52.95%, 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.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Leisure Equipment & Products industry average. The net income has decreased by 9.3% when compared to the same quarter one year ago, dropping from -$4.98 million to -$5.45 million.
  • 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. Compared to other companies in the Leisure Equipment & Products industry and the overall market, BLACK DIAMOND INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • BLACK DIAMOND 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 reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BLACK DIAMOND INC continued to lose money by earning -$0.28 versus -$0.34 in the prior year. This year, the market expects an improvement in earnings ($0.15 versus -$0.28).
  • 41.24% is the gross profit margin for BLACK DIAMOND INC which we consider to be strong. 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 -15.52% is in-line with the industry average.

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