Rovi (ROVI): Today's Weak On High Volume Stock

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

  • ROVI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $19.2 million.
  • ROVI has traded 94,771 shares today.
  • ROVI is trading at 3.19 times the normal volume for the stock at this time of day.
  • ROVI is trading at a new low 4.02% 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 ROVI:

Rovi Corporation provides solutions for the discovery and personalization of digital entertainment to service providers and consumer electronics (CE) industry worldwide. Currently there are 4 analysts that rate Rovi a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Rovi has been 1.2 million shares per day over the past 30 days. Rovi has a market cap of $1.3 billion and is part of the technology sector and computer software & services industry. The stock has a beta of -0.32 and a short float of 10.7% with 6.89 days to cover. Shares are down 4.3% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

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

Highlights from the ratings report include:
  • The gross profit margin for ROVI CORP is currently very high, coming in at 80.96%. 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 -14.91% is in-line with the industry average.
  • ROVI's debt-to-equity ratio of 0.94 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.72 is very high and demonstrates very strong liquidity.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Software industry average. The net income has decreased by 14.1% when compared to the same quarter one year ago, dropping from -$15.47 million to -$17.65 million.
  • Net operating cash flow has significantly decreased to -$9.05 million or 134.69% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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