IMS Health Holdings (IMS): Today's Weak On High Volume Stock - TheStreet

Trade-Ideas LLC identified

IMS Health Holdings

(

IMS

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

  • IMS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $34.7 million.
  • IMS has traded 121,228 shares today.
  • IMS is trading at 4.66 times the normal volume for the stock at this time of day.
  • IMS is trading at a new low 3.02% 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 IMS:

IMS Health Holdings, Inc. provides information and technology services to healthcare industry worldwide. IMS has a PE ratio of 26. Currently there are 10 analysts that rate IMS Health Holdings a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for IMS Health Holdings has been 1.1 million shares per day over the past 30 days. IMS Health has a market cap of $10.1 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.13 and a short float of 3.4% with 2.15 days to cover. Shares are up 11% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates IMS Health Holdings as a

hold

. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:

  • Compared to other companies in the Health Care Technology industry and the overall market, IMS HEALTH HOLDINGS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 246.82% to $185.00 million when compared to the same quarter last year. In addition, IMS HEALTH HOLDINGS INC has also vastly surpassed the industry average cash flow growth rate of -23.69%.
  • IMS HEALTH HOLDINGS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, IMS HEALTH HOLDINGS INC swung to a loss, reporting -$0.56 versus $0.31 in the prior year. This year, the market expects an improvement in earnings ($1.46 versus -$0.56).
  • The gross profit margin for IMS HEALTH HOLDINGS INC is rather high; currently it is at 53.77%. Regardless of IMS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.33% trails the industry average.
  • The debt-to-equity ratio is very high at 2.65 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, IMS maintains a poor quick ratio of 0.83, which illustrates the inability to avoid short-term cash problems.

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