Trade-Ideas LLC identified

Alere

(

ALR

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

  • ALR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $40.8 million.
  • ALR has traded 164,580 shares today.
  • ALR is trading at 2.28 times the normal volume for the stock at this time of day.
  • ALR is trading at a new low 4.00% 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 ALR:

Alere Inc. provides point-of-care diagnostics and services for infectious disease, cardiometabolic disease, and toxicology in the United States and internationally. The company operates through Professional Diagnostics and Consumer Diagnostics segments. Currently there are 4 analysts that rate Alere a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Alere has been 954,100 shares per day over the past 30 days. Alere has a market cap of $3.4 billion and is part of the health care sector and health services industry. The stock has a beta of 0.58 and a short float of 4.6% with 3.14 days to cover. Shares are up 0.5% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Alere as a

hold

. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and generally higher debt management risk.

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 Equipment & Supplies industry. The net income increased by 105.7% when compared to the same quarter one year prior, rising from -$98.38 million to $5.56 million.
  • Net operating cash flow has increased to $104.72 million or 16.01% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -16.95%.
  • ALERE INC 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, ALERE INC reported poor results of -$2.38 versus -$0.94 in the prior year. This year, the market expects an improvement in earnings ($2.20 versus -$2.38).
  • Currently the debt-to-equity ratio of 1.72 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Even though the debt-to-equity ratio is weak, ALR's quick ratio is somewhat strong at 1.21, demonstrating the ability to handle short-term liquidity needs.
  • ALR is off 10.94% from its price level of one year ago, reflecting the general market trend and ignoring their higher earnings per share compared to the year-earlier quarter. 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.

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