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

Healthways

(

HWAY

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Healthways as such a stock due to the following factors:

  • HWAY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $26.1 million.
  • HWAY has traded 57,653 shares today.
  • HWAY is down 3.3% today.
  • HWAY was up 5.5% yesterday.

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More details on HWAY:

Healthways, Inc., through its subsidiaries, provides specialized solutions to assist people to maintain and enhance their physical, emotional, and social well-being. Currently there are 4 analysts that rate Healthways a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for Healthways has been 862,200 shares per day over the past 30 days. Healthways has a market cap of $384.6 million and is part of the health care sector and health services industry. The stock has a beta of 0.20 and a short float of 24.6% with 2.70 days to cover. Shares are up 4.5% year to date as of the close of trading on Tuesday.

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 Healthways as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • HWAY's revenue growth trails the industry average of 10.4%. Since the same quarter one year prior, revenues slightly increased by 0.0%. 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.
  • Net operating cash flow has slightly increased to $12.47 million or 2.33% when compared to the same quarter last year. Despite an increase in cash flow of 2.33%, HEALTHWAYS INC is still growing at a significantly lower rate than the industry average of 162.01%.
  • HWAY's debt-to-equity ratio of 0.85 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.83 is weak.
  • 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 Providers & Services industry. The net income has significantly decreased by 64.2% when compared to the same quarter one year ago, falling from $5.03 million to $1.80 million.
  • The gross profit margin for HEALTHWAYS INC is rather low; currently it is at 21.31%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.08% trails that of the industry average.

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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