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

  • STMP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $51.5 million.
  • STMP has traded 75,015 shares today.
  • STMP is trading at 3.66 times the normal volume for the stock at this time of day.
  • STMP is trading at a new low 4.07% 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 STMP:

Stamps.com Inc. provides Internet-based postage solutions in the United States. Currently there are 3 analysts that rate Stamps.com a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Stamps.com has been 488,200 shares per day over the past 30 days. Stamps.com has a market cap of $1.8 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 0.33 and a short float of 12.3% with 3.05 days to cover. Shares are down 3% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Stamps.com as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • STMP's very impressive revenue growth greatly exceeded the industry average of 21.8%. Since the same quarter one year prior, revenues leaped by 67.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, STMP's share price has jumped by 85.52%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, STMP should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The gross profit margin for STAMPS.COM INC is currently very high, coming in at 84.76%. 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 -0.10% is in-line with the industry average.
  • STAMPS.COM INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, STAMPS.COM INC swung to a loss, reporting -$0.28 versus $2.24 in the prior year. This year, the market expects an improvement in earnings ($5.28 versus -$0.28).
  • STMP's debt-to-equity ratio of 0.68 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.97 is weak.

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