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

Amedisys

(

AMED

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Amedisys as such a stock due to the following factors:

  • AMED has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.4 million.
  • AMED has traded 683,236 shares today.
  • AMED is down 3.5% today.
  • AMED was up 29.8% yesterday.

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More details on AMED:

Amedisys, Inc., together with its subsidiaries, provides home health and hospice care services. It operates through two segments, Home Health and Hospice. The Home Health segment offers a range of services in the homes of individuals who may be recovering from an illness, injury, or surgery. Currently there is 1 analyst that rates Amedisys a buy, 4 analysts rate it a sell, and 4 rate it a hold.

The average volume for Amedisys has been 301,000 shares per day over the past 30 days. Amedisys has a market cap of $441.3 million and is part of the health care sector and health services industry. The stock has a beta of 1.38 and a short float of 25.8% with 7.96 days to cover. Shares are up 19.3% year-to-date as of the close of trading on Friday.

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 Amedisys as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow and feeble growth in its earnings per share.

Highlights from the ratings report include:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Health Care Providers & Services industry. The net income has significantly decreased by 563.5% when compared to the same quarter one year ago, falling from $2.68 million to -$12.42 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Health Care Providers & Services industry and the overall market, AMEDISYS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$6.34 million or 119.56% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • AMEDISYS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, AMEDISYS INC reported poor results of -$2.95 versus -$2.64 in the prior year. This year, the market expects an improvement in earnings ($0.03 versus -$2.95).
  • In its most recent trading session, AMED has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.

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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