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

BioScrip

(

BIOS

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

  • BIOS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.6 million.
  • BIOS has traded 79,885 shares today.
  • BIOS is trading at 2.19 times the normal volume for the stock at this time of day.
  • BIOS is trading at a new low 4.33% 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 BIOS:

BioScrip, Inc. provides home infusion and other home care services, and pharmacy benefit management (PBM) services in the United States. It operates in two segments, Infusion Services and PBM Services. Currently there are 5 analysts that rate BioScrip a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for BioScrip has been 1.3 million shares per day over the past 30 days. BioScrip has a market cap of $175.1 million and is part of the health care sector and health services industry. The stock has a beta of 0.90 and a short float of 33.7% with 18.37 days to cover. Shares are down 63.7% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates BioScrip as a

sell

. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins, weak operating cash flow, generally disappointing historical performance in the stock itself and generally high debt management risk.

Highlights from the ratings report include:

  • 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, BIOSCRIP INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for BIOSCRIP INC is currently lower than what is desirable, coming in at 27.05%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -7.51% trails that of the industry average.
  • Net operating cash flow has declined marginally to -$28.05 million or 7.93% when compared to the same quarter last year. Despite a decrease in cash flow of 7.93%, BIOSCRIP INC is in line with the industry average cash flow growth rate of -14.36%.
  • Currently the debt-to-equity ratio of 1.62 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, BIOS's quick ratio is somewhat strong at 1.10, demonstrating the ability to handle short-term liquidity needs.
  • BIOS's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 65.91%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.

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