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 $10.0 million.
  • ELGX has traded 196,308 shares today.
  • ELGX is trading at 4.91 times the normal volume for the stock at this time of day.
  • ELGX is trading at a new low 3.05% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in ELGX with the Ticky from Trade-Ideas. See the FREE profile for ELGX NOW at Trade-Ideas

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 950,200 shares per day over the past 30 days. Endologix has a market cap of $500.3 million and is part of the health care sector and health services industry. The stock has a beta of 0.85 and a short float of 15.2% with 6.47 days to cover. Shares are down 23.9% year-to-date as of the close of trading on Monday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Endologix as a

sell

. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

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 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.
  • ELGX'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 51.60%, 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.
  • ENDOLOGIX INC has improved earnings per share by 23.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ENDOLOGIX INC reported poor results of -$0.49 versus -$0.25 in the prior year. For the next year, the market is expecting a contraction of 25.5% in earnings (-$0.62 versus -$0.49).
  • ELGX's debt-to-equity ratio of 0.74 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 2.90 is very high and demonstrates very strong liquidity.
  • The gross profit margin for ENDOLOGIX INC is currently very high, coming in at 74.98%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -28.55% is in-line with the industry average.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.