Strong On High Volume: Quality Systems (QSII)

Trade-Ideas LLC identified Quality Systems (QSII) as a strong on high relative volume candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Quality Systems

(

QSII

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

  • QSII has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.1 million.
  • QSII has traded 60,406 shares today.
  • QSII is trading at 2.90 times the normal volume for the stock at this time of day.
  • QSII is trading at a new high 3.02% 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 QSII:

Quality Systems, Inc., together with its subsidiaries, develops and markets healthcare information systems that automate medical and dental practices, and networks of practices in the United States. The stock currently has a dividend yield of 4.9%. QSII has a PE ratio of 27. Currently there are 2 analysts that rate Quality Systems a buy, 3 analysts rate it a sell, and 13 rate it a hold.

The average volume for Quality Systems has been 433,700 shares per day over the past 30 days. Quality Systems has a market cap of $870.9 million and is part of the technology sector and computer software & services industry. The stock has a beta of 0.95 and a short float of 4.7% with 5.69 days to cover. Shares are down 6.5% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Quality Systems as a

hold

. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.

Highlights from the ratings report include:

  • QUALITY SYSTEMS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, QUALITY SYSTEMS INC increased its bottom line by earning $0.45 versus $0.27 in the prior year. This year, the market expects an improvement in earnings ($0.69 versus $0.45).
  • 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 75.0% when compared to the same quarter one year prior, rising from $4.75 million to $8.32 million.
  • 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 Technology industry and the overall market on the basis of return on equity, QUALITY SYSTEMS INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • After a year of stock price fluctuations, the net result is that QSII's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Net operating cash flow has significantly decreased to $10.18 million or 57.89% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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