Trade-Ideas: Spherix (SPEX) Is Today's Weak On High Relative Volume Stock

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

  • SPEX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.8 million.
  • SPEX has traded 728,188 shares today.
  • SPEX is trading at 10.00 times the normal volume for the stock at this time of day.
  • SPEX is trading at a new low 3.25% 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 SPEX:

Spherix Incorporated, an intellectual property company, owns, develops, acquires, and monetizes patented and unpatented intellectual properties. The company owns approximately 290 patents and patent applications. Its patent portfolio includes the U.S.

The average volume for Spherix has been 128,800 shares per day over the past 30 days. Spherix has a market cap of $5.7 million and is part of the services sector and diversified services industry. The stock has a beta of 0.89 and a short float of 4.2% with 0.15 days to cover. Shares are up 10.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Spherix as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Professional Services industry and the overall market, SPHERIX INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • SPEX's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 81.81%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • SPEX has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.79 is somewhat weak and could be cause for future problems.
  • Net operating cash flow has significantly increased by 80.92% to -$0.91 million when compared to the same quarter last year. In addition, SPHERIX INC has also vastly surpassed the industry average cash flow growth rate of 7.69%.
  • SPHERIX INC reported significant earnings per share improvement 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. During the past fiscal year, SPHERIX INC continued to lose money by earning -$28.50 versus -$51.87 in the prior year.

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