AthenaHealth (ATHN) Weak On High Volume

Trade-Ideas LLC identified AthenaHealth (ATHN) as a weak on high relative volume candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

AthenaHealth

(

ATHN

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

  • ATHN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $75.6 million.
  • ATHN has traded 170,306 shares today.
  • ATHN is trading at 6.84 times the normal volume for the stock at this time of day.
  • ATHN is trading at a new low 6.03% 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 ATHN:

athenahealth, Inc., together with its subsidiaries, operates as a business services company that provides ongoing billing, clinical-related, and other related services to medical group practices and health systems in the United States. ATHN has a PE ratio of 413. Currently there are 11 analysts that rate AthenaHealth a buy, 2 analysts rate it a sell, and 8 rate it a hold.

The average volume for AthenaHealth has been 483,300 shares per day over the past 30 days. AthenaHealth has a market cap of $6.3 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.69 and a short float of 47.1% with 21.55 days to cover. Shares are up 11.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates AthenaHealth as a

hold

. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, robust 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 premium valuation 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 Health Care Technology industry. The net income increased by 455.3% when compared to the same quarter one year prior, rising from -$1.63 million to $5.80 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 27.1%. Since the same quarter one year prior, revenues rose by 24.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 475.00% and other important driving factors, this stock has surged by 31.58% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • Net operating cash flow has decreased to $28.34 million or 29.83% 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.

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