Monotype Imaging Holdings (TYPE) Highlighted As Weak On High Volume

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

  • TYPE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.1 million.
  • TYPE has traded 93,441 shares today.
  • TYPE is trading at 5.13 times the normal volume for the stock at this time of day.
  • TYPE is trading at a new low 5.10% 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 TYPE:

Monotype Imaging Holdings Inc. develops, markets, and licenses technologies and fonts in the United States, the United Kingdom, Germany, Japan, and rest of Asia. The stock currently has a dividend yield of 1.8%. TYPE has a PE ratio of 41. Currently there are 3 analysts that rate Monotype Imaging Holdings a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Monotype Imaging Holdings has been 150,700 shares per day over the past 30 days. Monotype Imaging has a market cap of $993.8 million and is part of the technology sector and computer software & services industry. The stock has a beta of 1.02 and a short float of 1.9% with 5.06 days to cover. Shares are up 5.4% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Monotype Imaging Holdings as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.5%. Since the same quarter one year prior, revenues slightly increased by 8.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • TYPE 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. Along with this, the company maintains a quick ratio of 3.47, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has slightly increased to $11.19 million or 2.44% when compared to the same quarter last year. Despite an increase in cash flow, MONOTYPE IMAGING HOLDINGS's cash flow growth rate is still lower than the industry average growth rate of 22.64%.
  • 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 Software industry. The net income has significantly decreased by 27.2% when compared to the same quarter one year ago, falling from $7.36 million to $5.36 million.
  • 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. When compared to other companies in the Software industry and the overall market, MONOTYPE IMAGING HOLDINGS's return on equity is below that of both the industry average and the S&P 500.

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