Trade-Ideas LLC identified

DexCom

(

DXCM

) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified DexCom as such a stock due to the following factors:

  • DXCM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $66.1 million.
  • DXCM has traded 1.1 million shares today.
  • DXCM traded in a range 215.8% of the normal price range with a price range of $4.57.
  • DXCM traded above its daily resistance level (quality: 131 days, meaning that the stock is crossing a resistance level set by the last 131 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on DXCM:

DexCom, Inc., a medical device company, focuses on the design, development, and commercialization of continuous glucose monitoring systems in the United States and internationally. Currently there are 11 analysts that rate DexCom a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for DexCom has been 805,600 shares per day over the past 30 days. DexCom has a market cap of $5.7 billion and is part of the health care sector and health services industry. The stock has a beta of 0.16 and a short float of 4.7% with 4.23 days to cover. Shares are down 15.7% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates DexCom as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:

  • 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 Health Care Equipment & Supplies industry. The net income has significantly decreased by 48.8% when compared to the same quarter one year ago, falling from -$12.90 million to -$19.20 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, DEXCOM INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$0.20 million or 105.88% 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 share price of DEXCOM INC has not done very well: it is down 6.82% 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.
  • DEXCOM INC's earnings per share declined by 35.3% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, DEXCOM INC reported poor results of -$0.73 versus -$0.32 in the prior year. This year, the market expects an improvement in earnings (-$0.36 versus -$0.73).

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