DexCom (DXCM) Is Today's Strong On High Volume 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.
Trade-Ideas LLC identified
(
) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified DexCom as such a stock due to the following factors:
- DXCM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $56.2 million.
- DXCM has traded 73,336 shares today.
- DXCM is trading at 2.22 times the normal volume for the stock at this time of day.
- DXCM is trading at a new high 3.03% above yesterday's close.
'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 DXCM:
DexCom, Inc., a medical device company, focuses on the design, development, and commercialization of continuous glucose monitoring systems. Currently there are 9 analysts that rate DexCom a buy, 1 analyst rates it a sell, and 3 rate it a hold.
The average volume for DexCom has been 643,000 shares per day over the past 30 days. DexCom has a market cap of $4.6 billion and is part of the health care sector and health services industry. The stock has a beta of 0.50 and a short float of 3.4% with 2.74 days to cover. Shares are up 9.1% year-to-date as of the close of trading on Friday.
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Analysis:
rates DexCom as a
. The area that we feel has been the company's primary weakness has been its disappointing return on equity.
Highlights from the ratings report include:
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, DEXCOM INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for DEXCOM INC is currently very high, coming in at 73.31%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, DXCM's net profit margin of 1.54% significantly trails the industry average.
- Net operating cash flow has significantly increased by 90.90% to $8.40 million when compared to the same quarter last year. In addition, DEXCOM INC has also vastly surpassed the industry average cash flow growth rate of -7.31%.
- DXCM's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.10, which clearly demonstrates the ability to cover short-term cash needs.
- This stock has increased by 30.33% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in DXCM do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- You can view the full DexCom Ratings Report.
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