Liquidity Service (LQDT) Strong On High Relative Volume Today

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

  • LQDT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.7 million.
  • LQDT has traded 118,495 shares today.
  • LQDT is trading at 12.53 times the normal volume for the stock at this time of day.
  • LQDT is trading at a new high 4.26% 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 LQDT:

Liquidity Services, Inc. operates online auction marketplaces for sellers and buyers of surplus, salvage, and scrap assets in the United States. Currently there are no analysts that rate Liquidity Service a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Liquidity Service has been 309,600 shares per day over the past 30 days. Liquidity Service has a market cap of $203.0 million and is part of the services sector and retail industry. The stock has a beta of 0.79 and a short float of 12.6% with 7.71 days to cover. Shares are down 19.5% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Liquidity Service as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, 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 significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 6080.3% when compared to the same quarter one year ago, falling from -$0.71 million to -$43.70 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. Compared to other companies in the Internet Software & Services industry and the overall market, LIQUIDITY SERVICES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for LIQUIDITY SERVICES INC is rather low; currently it is at 22.92%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -55.10% is significantly below that of the industry average.
  • Net operating cash flow has decreased to $3.95 million or 41.63% 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.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 40.87%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 7200.00% compared to 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.

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