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Trade-Ideas LLC identified

Benefitfocus

(

BNFT

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

  • BNFT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.7 million.
  • BNFT has traded 51,005 shares today.
  • BNFT is trading at 2.24 times the normal volume for the stock at this time of day.
  • BNFT is trading at a new low 3.30% 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 BNFT:

TheStreet Recommends

Benefitfocus, Inc. provides cloud-based benefits software solutions for consumers, employers, insurance carriers, and brokers under a software-as-a-service model in the United States. Currently there are 7 analysts that rate Benefitfocus a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Benefitfocus has been 170,400 shares per day over the past 30 days. Benefitfocus has a market cap of $863.1 million and is part of the technology sector and computer software & services industry. Shares are down 9.4% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Benefitfocus as a

sell

. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow, deteriorating net income and generally high debt management risk.

Highlights from the ratings report include:

  • Net operating cash flow has decreased to -$10.46 million or 44.49% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The debt-to-equity ratio is very high at 11.18 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, BNFT has managed to keep a strong quick ratio of 1.60, which demonstrates the ability to cover short-term cash needs.
  • 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 Internet Software & Services industry average. The net income has decreased by 0.5% when compared to the same quarter one year ago, dropping from -$18.20 million to -$18.28 million.
  • BENEFITFOCUS INC has improved earnings per share by 11.1% 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, BENEFITFOCUS INC reported poor results of -$2.51 versus -$0.62 in the prior year. This year, the market expects an improvement in earnings (-$1.96 versus -$2.51).
  • Compared to other companies in the Internet Software & Services industry and the overall market, BENEFITFOCUS INC's return on equity significantly trails that of both the industry average and the S&P 500.

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