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Trade-Ideas LLC identified

Foundation Medicine

(

FMI

) as a weak 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 $4.9 million.
  • FMI has traded 125,716 shares today.
  • FMI is trading at 7.66 times the normal volume for the stock at this time of day.
  • FMI is trading at a new low 13.03% 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 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 6 rate it a hold.

The average volume for Foundation Medicine has been 319,300 shares per day over the past 30 days. Foundation Medicine has a market cap of $681.8 million and is part of the health care sector and health services industry. Shares are down 12.2% year-to-date as of the close of trading on Wednesday.

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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 feeble growth in its earnings per share, deteriorating net income and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • FOUNDATION MEDICINE INC's earnings per share declined by 30.4% 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, FOUNDATION MEDICINE INC reported poor results of -$1.86 versus -$0.94 in the prior year. For the next year, the market is expecting a contraction of 48.9% in earnings (-$2.77 versus -$1.86).
  • 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 Biotechnology industry. The net income has significantly decreased by 58.7% when compared to the same quarter one year ago, falling from -$12.98 million to -$20.60 million.
  • The share price of FOUNDATION MEDICINE INC has not done very well: it is down 10.38% 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.
  • 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.
  • The gross profit margin for FOUNDATION MEDICINE INC is currently very high, coming in at 70.80%. 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 -81.08% is in-line with the industry average.

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