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

  • TDS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $19.8 million.
  • TDS has traded 63,839 shares today.
  • TDS is trading at 3.94 times the normal volume for the stock at this time of day.
  • TDS is trading at a new low 6.00% 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 TDS:

Telephone and Data Systems, Inc., a telecommunications company, provides wireless, wireline, cable, and hosted and managed services in the United States. The stock currently has a dividend yield of 2.4%. TDS has a PE ratio of 13. Currently there are 2 analysts that rate Telephone and Data Systems a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Telephone and Data Systems has been 596,600 shares per day over the past 30 days. Telephone and Data Systems has a market cap of $2.6 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 0.88 and a short float of 1.4% with 1.33 days to cover. Shares are down 8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Telephone and Data Systems as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Wireless Telecommunication Services industry. The net income increased by 144.0% when compared to the same quarter one year prior, rising from -$116.03 million to $51.08 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 13.3%. Since the same quarter one year prior, revenues slightly increased by 7.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • TELEPHONE & DATA SYSTEMS INC reported significant earnings per share improvement 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, TELEPHONE & DATA SYSTEMS INC swung to a loss, reporting -$1.26 versus $1.28 in the prior year. This year, the market expects an improvement in earnings ($1.62 versus -$1.26).
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Wireless Telecommunication Services industry and the overall market on the basis of return on equity, TELEPHONE & DATA SYSTEMS INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • TDS is off 12.83% from its price level of one year ago, reflecting the general market trend and ignoring their higher earnings per share compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

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