Stocks to Watch: Edgewater Technology, GigaMedia, and GlobalSCAPE Show Promising Signs

Strategic Insights -

The day's trading saw three major indices down, with the Dow Jones Industrial Average trading down 95.08 points (-0.5%) at 17,729 as of Monday, Feb. 9, 2015, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,265 issues advancing vs. 1,837 declining with 125 unchanged. The Computer Software & Services industry as a whole closed the day down 0.4% versus the S&P 500, which was also down 0.4%. Top gainers within the Computer Software & Services industry included Formula Systems, GlobalSCAPE, GigaMedia, Edgewater Technology, and China Information Technology.

Key Takeaways:

  • Edgewater Technology (EDGW) showed a significant gain of $0.20 (2.8%) to $7.22 on heavy volume, with 34,329 shares exchanging hands as compared to its average daily volume of 15,600 shares.
  • The company has a market cap of $82.7 million and is part of the technology sector, with shares down 6.4% year-to-date as of the close of trading on Friday.
  • TheStreet Ratings rates Edgewater Technology as a buy, citing its revenue growth, solid financial position, reasonable valuation levels, solid stock price performance, and notable return on equity.
  • The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position, reasonable valuation levels, solid stock price performance, and notable return on equity.
  • Edgewater Technology has no debt to speak of, resulting in a debt-to-equity ratio of zero, which is a relatively favorable sign.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior, and it has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
  • GigaMedia (GIGM) was up $0.05 (6.0%) to $0.82 on light volume, with 45,379 shares exchanging hands as compared to its average daily volume of 117,300 shares.
  • The company has a market cap of $41.6 million and is part of the technology sector, with shares down 17.5% year-to-date as of the close of trading on Friday.
  • TheStreet Ratings rates GigaMedia as a sell, citing its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins, and generally disappointing historical performance in the stock itself.
  • The company's earnings per share declined by 50.0% in the most recent quarter compared to the same quarter a year ago, and it has suffered a declining pattern earnings per share over the past two years.
  • GlobalSCAPE (GSB) was up $0.19 (6.3%) to $3.20 on heavy volume, with 463,075 shares exchanging hands as compared to its average daily volume of 25,400 shares.
  • The company has a market cap of $49.9 million and is part of the technology sector, with shares up 7.2% year-to-date as of the close of trading on Friday.
  • TheStreet Ratings rates GlobalSCAPE as a buy, citing its revenue growth, largely solid financial position, reasonable valuation levels, and expanding profit margins.

Statistics:

  • The NYSE advances/declines ratio sits at 1,265 issues advancing vs. 1,837 declining with 125 unchanged.
  • The Dow Jones Industrial Average traded down 95.08 points (-0.5%) at 17,729 as of Monday, Feb. 9, 2015, 4:20 PM ET.
  • The Computer Software & Services industry as a whole closed the day down 0.4% versus the S&P 500, which was also down 0.4%.
  • Edgewater Technology (EDGW) gained 2.8% to $7.22 on heavy volume.
  • GigaMedia (GIGM) gained 6.0% to $0.82 on light volume.
  • GlobalSCAPE (GSB) gained 6.3% to $3.20 on heavy volume.
  • The company's debt-to-equity ratio of zero is a relatively favorable sign for Edgewater Technology.
  • Edgewater Technology's current return on equity greatly increased when compared to its ROE from the same quarter one year prior.
  • GigaMedia's earnings per share declined by 50.0% in the most recent quarter compared to the same quarter a year ago.
  • GlobalSCAPE's revenue growth was 2.4% since the same quarter one year prior.
  • The gross profit margin for GLOBALSCAPE INC is currently very high, coming in at 95.72%.

Sources:

  • TheStreet Wire
  • TheStreet Ratings Group
  • TheStreet, Inc.
  • Jim Cramer and Stephanie Link.