Trade-Ideas: Voltari (VLTC) Is Today’s “Perilous Reversal” Stock

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Trade-Ideas LLC identified Voltari ( VLTC) as a “perilous reversal” (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Voltari as such a stock due to the following factors:

  • VLTC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.2 million.
  • VLTC has traded 278,834 shares today.
  • VLTC is down 5.6% today.
  • VLTC was up 42.1% yesterday.

More details on VLTC:

Voltari Corporation, together with its subsidiaries, provides relevance-driven merchandising, digital marketing, and advertising solutions, primarily over smartphones and other mobile devices to brands, marketers, and advertising agencies. It also offers predictive analytics services.

The average volume for Voltari has been 4.0 million shares per day over the past 30 days. Voltari has a market cap of $56.1 million and is part of the technology sector and telecommunications industry. The stock has a beta of -5.20 and a short float of 14.7% with 0.94 days to cover. Shares are up 837.9% year-to-date as of the close of trading on Tuesday. Analysis:

TheStreet Quant Ratings rates Voltari 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:

  • VOLTARI 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. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, VOLTARI CORP reported poor results of -$7.17 versus -$6.49 in the prior year.
  • 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 138.2% when compared to the same quarter one year ago, falling from -$5.85 million to -$13.93 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 Software industry and the overall market, VOLTARI CORP’s return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for VOLTARI CORP is currently extremely low, coming in at 1.66%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, VLTC’s net profit margin of -354.91% significantly underperformed when compared to the industry average.
  • Net operating cash flow has declined marginally to -$4.96 million or 9.87% when compared to the same quarter last year. Despite a decrease in cash flow of 9.87%, VOLTARI CORP is in line with the industry average cash flow growth rate of -17.70%.



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