Weak On High Volume: Orbotech (ORBK)

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

  • ORBK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.6 million.
  • ORBK has traded 55,532 shares today.
  • ORBK is trading at 3.44 times the normal volume for the stock at this time of day.
  • ORBK is trading at a new low 3.04% 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 ORBK:

Orbotech Ltd. provides yield-enhancing and process enabling solutions for printed circuit boards (PCBs), liquid crystal displays (LCDs), and semiconductor devices in China, Europe, North America, Korea, Japan, and internationally. ORBK has a PE ratio of 12. Currently there are 6 analysts that rate Orbotech a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Orbotech has been 308,900 shares per day over the past 30 days. Orbotech has a market cap of $1.1 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.60 and a short float of 0.2% with 0.19 days to cover. Shares are up 13% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Orbotech as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 36.85% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ORBK should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • ORBOTECH LTD has improved earnings per share by 19.4% 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, ORBOTECH LTD increased its bottom line by earning $1.32 versus $0.83 in the prior year. This year, the market expects an improvement in earnings ($2.42 versus $1.32).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income increased by 22.3% when compared to the same quarter one year prior, going from $13.12 million to $16.05 million.
  • The current debt-to-equity ratio, 0.42, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, ORBK has a quick ratio of 2.43, which demonstrates the ability of the company to cover short-term liquidity needs.

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