Strong On High Volume: Cardtronics (CATM)

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

  • CATM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.4 million.
  • CATM has traded 66,091 shares today.
  • CATM is trading at 2.05 times the normal volume for the stock at this time of day.
  • CATM is trading at a new high 3.04% 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 CATM:

Cardtronics, Inc. provides automated consumer financial services through its network of automated teller machines (ATMs) and multi-function financial services kiosks in North America and Europe. CATM has a PE ratio of 23. Currently there are 7 analysts that rate Cardtronics a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Cardtronics has been 423,000 shares per day over the past 30 days. Cardtronics has a market cap of $1.6 billion and is part of the services sector and diversified services industry. The stock has a beta of 0.94 and a short float of 18.4% with 21.63 days to cover. Shares are up 3.2% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Cardtronics as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 18.3%. Since the same quarter one year prior, revenues slightly increased by 6.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CARDTRONICS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CARDTRONICS INC increased its bottom line by earning $1.48 versus $0.82 in the prior year. This year, the market expects an improvement in earnings ($3.08 versus $1.48).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 168.8% when compared to the same quarter one year prior, rising from $5.52 million to $14.84 million.
  • Net operating cash flow has increased to $109.44 million or 28.01% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -19.41%.
  • 35.52% is the gross profit margin for CARDTRONICS INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CATM's net profit margin of 4.89% significantly trails the industry average.

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