Trade-Ideas LLC identified

Computer Programs and Systems

(

CPSI

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

  • CPSI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.7 million.
  • CPSI has traded 63,892 shares today.
  • CPSI is trading at 19.35 times the normal volume for the stock at this time of day.
  • CPSI is trading at a new low 16.48% 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 CPSI:

TheStreet Recommends

Computer Programs and Systems, Inc. provides healthcare information technology solutions for rural and community hospitals in the United States. The company's integrated enterprise-wide system automates clinical and financial data management in the functional areas of a hospital. The stock currently has a dividend yield of 5.7%. CPSI has a PE ratio of 18. Currently there are no analysts that rate Computer Programs and Systems a buy, 2 analysts rate it a sell, and 14 rate it a hold.

The average volume for Computer Programs and Systems has been 99,300 shares per day over the past 30 days. Computer Programs and Systems has a market cap of $495.2 million and is part of the technology sector and computer software & services industry. The stock has a beta of 0.81 and a short float of 18.2% with 16.93 days to cover. Shares are down 26.6% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Computer Programs and Systems as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • CPSI has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.12, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has significantly increased by 187.08% to $3.78 million when compared to the same quarter last year. In addition, COMPUTER PROGRAMS & SYSTEMS has also vastly surpassed the industry average cash flow growth rate of -23.69%.
  • 43.73% is the gross profit margin for COMPUTER PROGRAMS & SYSTEMS which we consider to be strong. Regardless of CPSI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CPSI's net profit margin of 12.53% compares favorably to the industry average.
  • COMPUTER PROGRAMS & SYSTEMS's earnings per share declined by 35.8% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, COMPUTER PROGRAMS & SYSTEMS reported lower earnings of $2.93 versus $2.96 in the prior year. For the next year, the market is expecting a contraction of 28.3% in earnings ($2.10 versus $2.93).
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Health Care Technology industry average. The net income has significantly decreased by 35.2% when compared to the same quarter one year ago, falling from $9.11 million to $5.90 million.

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