Stratasys (SSYS) Is Today's Roof Leaker Stock
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.Trade-Ideas LLC identified Stratasys (SSYS) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Stratasys as such a stock due to the following factors:
- SSYS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $115.9 million.
- SSYS has traded 1.3 million shares today.
- SSYS is trading at 1.50 times the normal volume for the stock at this time of day.
- SSYS crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.EXCLUSIVE OFFER: Get the inside scoop on opportunities in SSYS with the Ticky from Trade-Ideas. See the FREE profile for SSYS NOW at Trade-IdeasMore details on SSYS: Stratasys Ltd. provides additive manufacturing (AM) solutions for the creation of parts used in the processes of designing and manufacturing products and for the direct manufacture of end parts. Currently there are 12 analysts that rate Stratasys a buy, no analysts rate it a sell, and 4 rate it a hold.The average volume for Stratasys has been 1.3 million shares per day over the past 30 days. Stratasys has a market cap of $5.7 billion and is part of the technology sector and computer hardware industry. The stock has a beta of 2.16 and a short float of 4.9% with 2.00 days to cover. Shares are down 15.1% year-to-date as of the close of trading on Thursday.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.TheStreetRatings.com Analysis:TheStreet Quant Ratings rates Stratasys as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.Highlights from the ratings report include:
- SSYS's very impressive revenue growth greatly exceeded the industry average of 4.7%. Since the same quarter one year prior, revenues leaped by 118.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- SSYS 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 5.23, which clearly demonstrates the ability to cover short-term cash needs.
- STRATASYS LTD reported significant earnings per share improvement 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, STRATASYS LTD swung to a loss, reporting -$0.70 versus $0.43 in the prior year. This year, the market expects an improvement in earnings ($2.21 versus -$0.70).
- The gross profit margin for STRATASYS LTD is rather high; currently it is at 50.24%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, SSYS's net profit margin of -1.28% significantly underperformed when compared to the industry average.
- 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 Computers & Peripherals industry and the overall market, STRATASYS LTD's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full Stratasys Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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