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

  • IRDM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.2 million.
  • IRDM has traded 293,543 shares today.
  • IRDM is trading at 2.27 times the normal volume for the stock at this time of day.
  • IRDM is trading at a new low 3.03% 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 IRDM:

Iridium Communications Inc. provides mobile voice and data communications services through satellite to businesses, the U.S. and foreign governments, non-governmental organizations, and consumers worldwide. IRDM has a PE ratio of 8. Currently there are 2 analysts that rate Iridium Communications a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Iridium Communications has been 797,300 shares per day over the past 30 days. Iridium has a market cap of $726.8 million and is part of the technology sector and telecommunications industry. The stock has a beta of 2.13 and a short float of 26.3% with 22.55 days to cover. Shares are down 8.9% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Iridium Communications as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Diversified Telecommunication Services industry. The net income has significantly decreased by 401.4% when compared to the same quarter one year ago, falling from $23.04 million to -$69.43 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Diversified Telecommunication Services industry and the overall market, IRIDIUM COMMUNICATIONS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $54.54 million or 11.36% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 28.92%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 505.26% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • IRIDIUM COMMUNICATIONS 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 reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, IRIDIUM COMMUNICATIONS INC swung to a loss, reporting -$0.15 versus $0.69 in the prior year. This year, the market expects an improvement in earnings ($0.86 versus -$0.15).

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