Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified

Hanger

(

HGR

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

  • HGR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.4 million.
  • HGR has traded 112,905 shares today.
  • HGR is trading at 8.45 times the normal volume for the stock at this time of day.
  • HGR is trading at a new low 10.08% 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 HGR:

Hanger, Inc. provides orthotic and prosthetic (O&P) patient care services, distributes O&P devices and components, manages O&P networks, and offers therapeutic solutions in the United States. It operates in two segments, Patient Care, and Products & Services. HGR has a PE ratio of 12.9. Currently there are 2 analysts that rate Hanger a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Hanger has been 405,900 shares per day over the past 30 days. Hanger has a market cap of $749.6 million and is part of the health care sector and health services industry. The stock has a beta of 1.87 and a short float of 7.9% with 5.56 days to cover. Shares are down 46.1% year-to-date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Hanger as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:

  • HGR's revenue growth trails the industry average of 20.0%. Since the same quarter one year prior, revenues slightly increased by 3.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.89, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, HGR has a quick ratio of 1.97, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Looking at the price performance of HGR's shares over the past 12 months, there is not much good news to report: the stock is down 41.15%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than 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 company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Health Care Providers & Services industry average. The net income has decreased by 10.4% when compared to the same quarter one year ago, dropping from $14.08 million to $12.62 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Health Care Providers & Services industry and the overall market, HANGER INC's return on equity is below that of both the industry average and the S&P 500.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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