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.

Trade-Ideas LLC identified

Luminex

(

LMNX

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

  • LMNX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.8 million.
  • LMNX has traded 177,673 shares today.
  • LMNX is trading at 31.59 times the normal volume for the stock at this time of day.
  • LMNX is trading at a new high 19.12% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 LMNX:

Luminex Corporation develops, manufactures, and sells proprietary biological testing technologies and products for the diagnostics and life sciences industries worldwide. LMNX has a PE ratio of 18. Currently there are no analysts that rate Luminex a buy, 1 analyst rates it a sell, and 6 rate it a hold.

The average volume for Luminex has been 241,400 shares per day over the past 30 days. Luminex has a market cap of $741.3 million and is part of the health care sector and health services industry. The stock has a beta of 0.05 and a short float of 11.8% with 16.79 days to cover. Shares are down 7.7% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Luminex as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, expanding profit margins and impressive record of earnings per share growth. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • LMNX's revenue growth has slightly outpaced the industry average of 5.1%. Since the same quarter one year prior, revenues slightly increased by 2.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • LMNX has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.99, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for LUMINEX CORP is currently very high, coming in at 73.63%. Regardless of LMNX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LMNX's net profit margin of 12.90% compares favorably to the industry average.
  • LUMINEX CORP has improved earnings per share by 28.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, LUMINEX CORP increased its bottom line by earning $0.91 versus $0.17 in the prior year. For the next year, the market is expecting a contraction of 39.6% in earnings ($0.55 versus $0.91).

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