Trade-Ideas LLC identified

Endologix

(

ELGX

) as a strong 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 $18.3 million.
  • ELGX has traded 155,031 shares today.
  • ELGX is trading at 4.31 times the normal volume for the stock at this time of day.
  • ELGX is trading at a new high 4.06% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 5 analysts that rate Endologix a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Endologix has been 933,400 shares per day over the past 30 days. Endologix has a market cap of $984.3 million and is part of the health care sector and health services industry. The stock has a beta of 0.60 and a short float of 12.7% with 8.08 days to cover. Shares are up 24.4% 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, generally disappointing historical performance in the stock itself 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 6.8% 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.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 27.76%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 264.70% compared to the year-earlier 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.
  • The debt-to-equity ratio of 1.26 is relatively high when compared with the industry average, suggesting a need for better debt level management. Regardless of the company's weak debt-to-equity ratio, ELGX has managed to keep a strong quick ratio of 2.10, which demonstrates the ability to cover short-term cash needs.

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