Trade-Ideas: RPX (RPXC) Is Today's Strong On High Relative Volume Stock

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

  • RPXC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.9 million.
  • RPXC has traded 68,332 shares today.
  • RPXC is trading at 3.43 times the normal volume for the stock at this time of day.
  • RPXC is trading at a new high 3.03% 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 RPXC:

RPX Corporation provides patent risk management solutions in the United States, Japan, Korea, and internationally. It offers a subscription-based patent risk management solution that facilitates exchanges of value between owners and users of patents. RPXC has a PE ratio of 21. Currently there is 1 analyst that rates RPX a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for RPX has been 324,800 shares per day over the past 30 days. RPX has a market cap of $510.6 million and is part of the services sector and diversified services industry. The stock has a beta of 1.22 and a short float of 2.6% with 2.39 days to cover. Shares are down 8.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates RPX as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • RPXC's debt-to-equity ratio is very low at 0.20 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, RPXC has a quick ratio of 1.61, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for RPX CORP is currently very high, coming in at 93.95%. Regardless of RPXC'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 5.31% trails the industry average.
  • Net operating cash flow has decreased to $55.13 million or 28.46% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Professional Services industry and the overall market, RPX CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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