Acorn International (ATV) Is Weak On High Volume Today

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

  • ATV has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.3 million.
  • ATV has traded 144,358 shares today.
  • ATV is trading at 192.12 times the normal volume for the stock at this time of day.
  • ATV is trading at a new low 18.11% 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 ATV:

Acorn International, Inc., an integrated multi-platform marketing company, develops, promotes, and sells a portfolio of proprietary-branded products; and third parties products in the People's Republic of China.

The average volume for Acorn International has been 89,700 shares per day over the past 30 days. Acorn International has a market cap of $79.7 million and is part of the services sector and retail industry. Shares are up 517.3% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Acorn International as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins, feeble growth in its earnings per share and generally disappointing historical performance in the stock itself.

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 Internet & Catalog Retail industry and the overall market, ACORN INTERNATIONAL INC -ADR's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ACORN INTERNATIONAL INC -ADR is currently lower than what is desirable, coming in at 34.58%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -66.94% is significantly below that of the industry average.
  • ACORN INTERNATIONAL INC -ADR reported flat earnings per share in the most recent quarter. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, ACORN INTERNATIONAL INC -ADR reported poor results of -$1.62 versus -$1.45 in the prior year.
  • ATV's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 78.30%, which is also worse than the performance of the S&P 500 Index. 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 company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Internet & Catalog Retail industry average, but is greater than that of the S&P 500. The net income increased by 0.1% when compared to the same quarter one year prior, going from -$13.79 million to -$13.78 million.

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