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

  • ERII has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.2 million.
  • ERII has traded 341,177 shares today.
  • ERII is trading at 16.71 times the normal volume for the stock at this time of day.
  • ERII is trading at a new low 14.00% 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 ERII:

Energy Recovery, Inc. provides energy solutions to industrial fluid flow markets worldwide. Currently there is 1 analyst that rates Energy Recovery a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Energy Recovery has been 557,100 shares per day over the past 30 days. Energy Recovery has a market cap of $569.4 million and is part of the industrial goods sector and industrial industry. Shares are up 57.6% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Energy Recovery as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:
  • ERII's very impressive revenue growth greatly exceeded the industry average of 14.0%. Since the same quarter one year prior, revenues leaped by 92.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ERII's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 7.89, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for ENERGY RECOVERY INC is currently very high, coming in at 74.35%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -17.39% is in-line with the industry average.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Machinery industry and the overall market, ENERGY RECOVERY INC's return on equity significantly trails that of both the industry average and the S&P 500.

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