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

  • IRDM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.0 million.
  • IRDM has traded 249,907 shares today.
  • IRDM is trading at 10.84 times the normal volume for the stock at this time of day.
  • IRDM is trading at a new low 7.04% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in IRDM with the Ticky from Trade-Ideas. See the FREE profile for IRDM NOW at Trade-Ideas

More details on IRDM:

Iridium Communications Inc. provides mobile voice and data communications services through satellite to businesses, the U.S. and foreign governments, non-governmental organizations, and consumers worldwide. IRDM has a PE ratio of 1. Currently there is 1 analyst that rates Iridium Communications a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Iridium Communications has been 598,100 shares per day over the past 30 days. Iridium has a market cap of $869.2 million and is part of the technology sector and telecommunications industry. The stock has a beta of 2.18 and a short float of 25.7% with 38.60 days to cover. Shares are up 9.8% year-to-date as of the close of trading on Wednesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Iridium Communications as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income and revenue growth. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Telecommunication Services industry. The net income increased by 35.7% when compared to the same quarter one year prior, rising from $21.02 million to $28.52 million.
  • IRDM's revenue growth trails the industry average of 19.7%. Since the same quarter one year prior, revenues slightly increased by 7.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • IRIDIUM COMMUNICATIONS INC has improved earnings per share by 35.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, IRIDIUM COMMUNICATIONS INC swung to a loss, reporting -$0.15 versus $0.69 in the prior year. This year, the market expects an improvement in earnings ($0.88 versus -$0.15).
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Diversified Telecommunication Services industry and the overall market, IRIDIUM COMMUNICATIONS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has declined marginally to $47.02 million or 8.75% 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.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.