ORBCOMM (ORBC) Weak On High Volume

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

  • ORBC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.9 million.
  • ORBC has traded 104,844 shares today.
  • ORBC is trading at 5.17 times the normal volume for the stock at this time of day.
  • ORBC is trading at a new low 5.18% 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 ORBC:

ORBCOMM Inc. provides machine-to-machine and Internet of things solutions in the United States, South America, Japan, Europe, and internationally. Currently there are 5 analysts that rate ORBCOMM a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for ORBCOMM has been 535,600 shares per day over the past 30 days. ORBCOMM has a market cap of $743.4 million and is part of the technology sector and telecommunications industry. The stock has a beta of 0.94 and a short float of 9.3% with 11.29 days to cover. Shares are up 46.3% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates ORBCOMM as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. 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 27.0% when compared to the same quarter one year prior, rising from -$2.87 million to -$2.10 million.
  • ORBC's revenue growth trails the industry average of 16.9%. Since the same quarter one year prior, revenues slightly increased by 2.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • ORBCOMM INC has improved earnings per share by 25.0% 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, ORBCOMM INC reported poor results of -$0.19 versus -$0.08 in the prior year. This year, the market expects an improvement in earnings (-$0.11 versus -$0.19).
  • Net operating cash flow has decreased to $3.66 million or 23.96% 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. Compared to other companies in the Diversified Telecommunication Services industry and the overall market, ORBCOMM INC's return on equity significantly trails that of both the industry average and the S&P 500.

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