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

  • ERII has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.0 million.
  • ERII has traded 80,903 shares today.
  • ERII is trading at 3.60 times the normal volume for the stock at this time of day.
  • ERII is trading at a new high 6.03% 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 ERII:

Energy Recovery, Inc. designs, develops, and manufactures energy recovery devices (ERDs) to transform untapped energy into reusable energy from industrial fluid flows and pressure cycles. Currently there is 1 analyst that rates Energy Recovery a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Energy Recovery has been 387,100 shares per day over the past 30 days. Energy Recovery has a market cap of $421.2 million and is part of the industrial goods sector and industrial industry. The stock has a beta of 6.49 and a short float of 10% with 6.87 days to cover. Shares are up 6.7% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Energy Recovery as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:
  • ERII's very impressive revenue growth greatly exceeded the industry average of 20.0%. Since the same quarter one year prior, revenues leaped by 126.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • ERII's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 4.10, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for ENERGY RECOVERY INC is rather high; currently it is at 65.58%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -2.80% trails the industry average.
  • ENERGY RECOVERY 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, ENERGY RECOVERY INC reported poor results of -$0.36 versus -$0.07 in the prior year. This year, the market expects an improvement in earnings (-$0.23 versus -$0.36).
  • 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 Machinery industry and the overall market, ENERGY RECOVERY INC's return on equity significantly trails that of both the industry average and the S&P 500.

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