Trade-Ideas LLC identified

Endologix

(

ELGX

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

  • ELGX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $21.5 million.
  • ELGX has traded 69,686 shares today.
  • ELGX is trading at 2.27 times the normal volume for the stock at this time of day.
  • ELGX is trading at a new low 3.07% 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 ELGX:

Endologix, Inc. develops, manufactures, markets, and sells medical devices for the treatment of abdominal aortic aneurysms in the United States and internationally. Currently there are 7 analysts that rate Endologix a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Endologix has been 1.2 million shares per day over the past 30 days. Endologix has a market cap of $1.0 billion and is part of the health care sector and health services industry. The stock has a beta of 0.67 and a short float of 14.8% with 6.81 days to cover. Shares are up 28.3% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Endologix as a

sell

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

Highlights from the ratings report include:

  • ENDOLOGIX 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, ENDOLOGIX INC reported poor results of -$0.74 versus -$0.49 in the prior year. For the next year, the market is expecting a contraction of 6.1% in earnings (-$0.79 versus -$0.74).
  • 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 Equipment & Supplies industry. The net income has significantly decreased by 325.1% when compared to the same quarter one year ago, falling from -$11.21 million to -$47.67 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 Equipment & Supplies industry and the overall market, ENDOLOGIX 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 -$33.36 million or 184.45% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The share price of ENDOLOGIX INC has not done very well: it is down 22.69% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when 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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