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Trade-Ideas LLC identified

Benefitfocus

(

BNFT

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

  • BNFT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.6 million.
  • BNFT has traded 58,329 shares today.
  • BNFT is trading at 8.42 times the normal volume for the stock at this time of day.
  • BNFT is trading at a new low 10.24% 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 BNFT:

TheStreet Recommends

Benefitfocus, Inc. provides cloud-based benefits management platform for consumers, employers, insurance carriers, and brokers in the United States. It operates through Employer and Carrier segments. Currently there are 6 analysts that rate Benefitfocus a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Benefitfocus has been 204,200 shares per day over the past 30 days. Benefitfocus has a market cap of $1.1 billion and is part of the technology sector and computer software & services industry. Shares are down 5% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Benefitfocus as a

sell

. Among the areas we feel are negative, one of the most important has been weak operating cash flow.

Highlights from the ratings report include:

  • Net operating cash flow has significantly decreased to -$19.82 million or 220.93% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 46.53% is the gross profit margin for BENEFITFOCUS INC which we consider to be strong. Regardless of BNFT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BNFT's net profit margin of -24.36% significantly underperformed when compared to the industry average.
  • The stock has risen over the past year at a faster pace than the S&P 500, reflecting the earnings growth of the company. 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.
  • BENEFITFOCUS INC has improved earnings per share by 16.4% 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, BENEFITFOCUS INC continued to lose money by earning -$2.20 versus -$2.51 in the prior year. This year, the market expects an improvement in earnings (-$1.15 versus -$2.20).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Internet Software & Services industry average. The net income increased by 8.8% when compared to the same quarter one year prior, going from -$14.65 million to -$13.35 million.

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