Trade-Ideas LLC identified

Invacare

(

IVC

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

  • IVC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.6 million.
  • IVC has traded 72,726 shares today.
  • IVC is trading at 2.33 times the normal volume for the stock at this time of day.
  • IVC 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 IVC:

Invacare Corporation designs, manufactures, and distributes medical equipment for use in home health care, retail, and extended care markets. It operates through four segments: North America/Home Medical Equipment, Institutional Products Group, Europe, and Asia/Pacific. The stock currently has a dividend yield of 0.5%. IVC has a PE ratio of 14. Currently there is 1 analyst that rates Invacare a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Invacare has been 469,100 shares per day over the past 30 days. Invacare has a market cap of $340.1 million and is part of the health care sector and health services industry. The stock has a beta of 2.54 and a short float of 15.7% with 9.89 days to cover. Shares are down 41.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Invacare as a

sell

. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • 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 Equipment & Supplies industry average. The net income has decreased by 18.8% when compared to the same quarter one year ago, dropping from -$7.25 million to -$8.62 million.
  • The gross profit margin for INVACARE CORP is currently lower than what is desirable, coming in at 26.35%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -3.34% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$38.71 million or 69.82% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Looking at the price performance of IVC's shares over the past 12 months, there is not much good news to report: the stock is down 46.86%, 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.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, INVACARE CORP's return on equity significantly trails that of both the industry average and the S&P 500.

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