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

  • AUO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.8 million.
  • AUO has traded 182,342 shares today.
  • AUO is trading at 3.38 times the normal volume for the stock at this time of day.
  • AUO is trading at a new low 3.03% 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 AUO:

AU Optronics Corp. researches, develops, produces, and sells thin film transistor liquid crystal displays and other flat panel displays. The company operates through two segments, Display and Solar. The stock currently has a dividend yield of 1.9%. AUO has a PE ratio of 5. Currently there is 1 analyst that rates AU Optronics a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for AU Optronics has been 563,600 shares per day over the past 30 days. AU Optronics has a market cap of $3.3 billion and is part of the technology sector and electronics industry. Shares are up 18.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates AU Optronics as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • AU OPTRONICS CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, AU OPTRONICS CORP reported lower earnings of $0.23 versus $0.53 in the prior year. For the next year, the market is expecting a contraction of 156.5% in earnings (-$0.13 versus $0.23).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 203.1% when compared to the same quarter one year ago, falling from $165.05 million to -$170.20 million.
  • 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 Electronic Equipment, Instruments & Components industry and the overall market, AU OPTRONICS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for AU OPTRONICS CORP is currently extremely low, coming in at 14.48%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -7.69% is significantly below that of the industry average.
  • Net operating cash flow has decreased to $224.67 million or 43.65% 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.

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