Trade-Ideas LLC identified Stamps.com ( STMP) as a "dead cat bounce" (down big yesterday but up big today) 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 $126.0 million.
  • STMP has traded 545,744 shares today.
  • STMP is up 3% today.
  • STMP was down 5.3% yesterday.

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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 715,400 shares per day over the past 30 days. Stamps.com has a market cap of $1.5 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 0.04 and a short float of 14.8% with 2.27 days to cover. Shares are down 23.7% year-to-date as of the close of trading on Tuesday.

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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, increase in net income, solid stock price performance, growth in earnings per share and expanding profit margins. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • STMP's very impressive revenue growth greatly exceeded the industry average of 20.7%. Since the same quarter one year prior, revenues leaped by 85.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 1464.7% when compared to the same quarter one year prior, rising from -$0.97 million to $13.24 million.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • STAMPS.COM INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in 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).
  • The gross profit margin for STAMPS.COM INC is currently very high, coming in at 82.13%. Regardless of STMP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 16.17% trails the industry average.

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