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

  • AUO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.9 million.
  • AUO has traded 334,222 shares today.
  • AUO is trading at 2.95 times the normal volume for the stock at this time of day.
  • AUO is trading at a new low 3.04% 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 AUO:

AU Optronics Corp. engages in the research, development, production, and sale of thin film transistor liquid crystal displays (TFT-LCDs) and other flat panel displays. It operates through two segments, Display and Solar. The stock currently has a dividend yield of 4%. AUO has a PE ratio of 18. Currently there is 1 analyst that rates AU Optronics a buy, 1 analyst rates it a sell, and none rate it a hold.

The average volume for AU Optronics has been 1.7 million shares per day over the past 30 days. AU Optronics has a market cap of $2.5 billion and is part of the technology sector and electronics industry. Shares are down 41.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates AU Optronics as a hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • The revenue fell significantly faster than the industry average of 2.0%. Since the same quarter one year prior, revenues fell by 31.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has significantly decreased to $184.36 million or 70.71% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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 Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 65.1% when compared to the same quarter one year ago, falling from $238.18 million to $83.19 million.

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