Trade-Ideas LLC identified

Illumina

(

ILMN

) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Illumina as such a stock due to the following factors:

  • ILMN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $232.6 million.
  • ILMN has traded 916,001 shares today.
  • ILMN traded in a range 212.4% of the normal price range with a price range of $12.05.
  • ILMN traded below its daily resistance level (quality: 149 days, meaning that the stock is crossing a resistance level set by the last 149 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on ILMN:

Illumina, Inc. provides sequencing and array-based solutions for genetic analysis in North America, Europe, Latin America, the Asia-Pacific, the Middle East, and South Africa. ILMN has a PE ratio of 58. Currently there are 13 analysts that rate Illumina a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Illumina has been 1.4 million shares per day over the past 30 days. Illumina has a market cap of $27.5 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.75 and a short float of 3.2% with 3.57 days to cover. Shares are up 2% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Illumina as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and impressive record of earnings per share growth. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 5.5%. Since the same quarter one year prior, revenues rose by 20.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.73, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with this, the company maintains a quick ratio of 2.59, which clearly demonstrates the ability to cover short-term cash needs.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Life Sciences Tools & Services industry and the overall market, ILLUMINA INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • The gross profit margin for ILLUMINA INC is currently very high, coming in at 75.47%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 18.95% is above that of the industry average.
  • ILLUMINA INC reported significant earnings per share improvement 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. We feel that this trend should continue. During the past fiscal year, ILLUMINA INC increased its bottom line by earning $2.37 versus $0.86 in the prior year. This year, the market expects an improvement in earnings ($3.45 versus $2.37).

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