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Trade-Ideas LLC identified

Foundation Medicine

(

FMI

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

  • FMI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.0 million.
  • FMI has traded 308,059 shares today.
  • FMI is trading at 7.84 times the normal volume for the stock at this time of day.
  • FMI is trading at a new high 3.57% 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 FMI:

TheStreet Recommends

Foundation Medicine, Inc. provides various molecular information products in the United States. Currently there is 1 analyst that rates Foundation Medicine a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Foundation Medicine has been 207,900 shares per day over the past 30 days. Foundation Medicine has a market cap of $658.5 million and is part of the health care sector and health services industry. Shares are down 9.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Foundation Medicine as a

sell

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

Highlights from the ratings report include:

  • FMI'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 44.86%, 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.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Biotechnology industry average. The net income has decreased by 2.0% when compared to the same quarter one year ago, dropping from -$16.97 million to -$17.31 million.
  • FOUNDATION MEDICINE INC has improved earnings per share by 15.3% 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, FOUNDATION MEDICINE INC reported poor results of -$2.72 versus -$1.86 in the prior year. For the next year, the market is expecting a contraction of 11.8% in earnings (-$3.04 versus -$2.72).
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Biotechnology industry and the overall market, FOUNDATION MEDICINE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has slightly increased to -$9.97 million or 8.64% when compared to the same quarter last year. Despite an increase in cash flow, FOUNDATION MEDICINE INC's average is still marginally south of the industry average growth rate of 11.21%.

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