DigitalGlobe (DGI) Flagged As Strong On High Volume

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

  • DGI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $11.5 million.
  • DGI has traded 135,145 shares today.
  • DGI is trading at 8.95 times the normal volume for the stock at this time of day.
  • DGI is trading at a new high 16.03% 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 DGI:

DigitalGlobe, Inc. provides earth-imagery products and services sourced from own satellite constellation and third-party providers in the United States and internationally. DGI has a PE ratio of 73. Currently there are 4 analysts that rate DigitalGlobe a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for DigitalGlobe has been 621,600 shares per day over the past 30 days. DigitalGlobe has a market cap of $1.2 billion and is part of the industrial goods sector and aerospace/defense industry. The stock has a beta of 0.75 and a short float of 9.8% with 9.17 days to cover. Shares are up 20.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates DigitalGlobe as a sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, unimpressive growth in net income and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • Looking at the price performance of DGI's shares over the past 12 months, there is not much good news to report: the stock is down 45.90%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, DGI is still more expensive than most of the other companies in its industry.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Aerospace & Defense industry average. The net income has decreased by 13.1% when compared to the same quarter one year ago, dropping from $12.20 million to $10.60 million.
  • DIGITALGLOBE INC's earnings per share declined by 7.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, DIGITALGLOBE INC increased its bottom line by earning $0.26 versus $0.18 in the prior year. For the next year, the market is expecting a contraction of 50.0% in earnings ($0.13 versus $0.26).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Aerospace & Defense industry and the overall market, DIGITALGLOBE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 2.9%. Since the same quarter one year prior, revenues slightly dropped by 2.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

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