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

  • SHOR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.0 million.
  • SHOR has traded 183,985 shares today.
  • SHOR is trading at 7.96 times the normal volume for the stock at this time of day.
  • SHOR is trading at a new low 4.03% 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 SHOR:

ShoreTel, Inc., together with its subsidiaries, provides business communication solutions in the United States and internationally. The company offers integrated voice, video, data, and mobile applications based on Internet protocol technologies. Currently there are 6 analysts that rate ShoreTel a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for ShoreTel has been 558,900 shares per day over the past 30 days. ShoreTel has a market cap of $618.5 million and is part of the technology sector and telecommunications industry. The stock has a beta of 1.33 and a short float of 2% with 2.93 days to cover. Shares are up 28.4% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates ShoreTel as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • Powered by its strong earnings growth of 200.00% and other important driving factors, this stock has surged by 28.09% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 485.2% when compared to the same quarter one year prior, rising from $0.37 million to $2.14 million.
  • SHOR 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 1.23, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has significantly increased by 76.11% to $19.57 million when compared to the same quarter last year. In addition, SHORETEL INC has also vastly surpassed the industry average cash flow growth rate of 7.70%.
  • The gross profit margin for SHORETEL INC is rather high; currently it is at 69.72%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, SHOR's net profit margin of 2.37% significantly trails the industry average.

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