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

  • TI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.7 million.
  • TI has traded 51,275 shares today.
  • TI is trading at 7.16 times the normal volume for the stock at this time of day.
  • TI is trading at a new low 4.09% 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 TI:

Telecom Italia S.p.A., together with its subsidiaries, provides fixed and mobile telecommunications services. Currently there are 3 analysts that rate Telecom Italia SpA a buy, 1 analyst rates it a sell, and none rate it a hold.

The average volume for Telecom Italia SpA has been 266,100 shares per day over the past 30 days. Telecom Italia SpA has a market cap of $20.1 billion and is part of the technology sector and telecommunications industry. Shares are down 20.7% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Telecom Italia SpA 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 high debt management risk and generally disappointing historical performance in the stock itself.

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 223.7% when compared to the same quarter one year ago, falling from $389.78 million to -$482.25 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, TELECOM ITALIA SPA's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $1,565.34 million or 24.90% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Despite the current debt-to-equity ratio of 1.96, it is still below the industry average, suggesting that this level of debt is acceptable within the Diversified Telecommunication Services industry. Despite the fact that TI's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.69 is low and demonstrates weak liquidity.
  • The share price of TELECOM ITALIA SPA has not done very well: it is down 11.67% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when 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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