Trade-Ideas LLC identified

Cardiovascular Systems

(

CSII

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

  • CSII has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.1 million.
  • CSII has traded 108,851 shares today.
  • CSII is trading at 3.64 times the normal volume for the stock at this time of day.
  • CSII is trading at a new low 14.02% 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 CSII:

Cardiovascular Systems, Inc., a medical technology company, develops, manufactures, and markets devices to treat vascular diseases in the United States. Currently there are 4 analysts that rate Cardiovascular Systems a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Cardiovascular Systems has been 551,600 shares per day over the past 30 days. Cardiovascular Systems has a market cap of $503.7 million and is part of the health care sector and health services industry. The stock has a beta of 2.19 and a short float of 10% with 6.03 days to cover. Shares are down 47.1% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Cardiovascular Systems as a

sell

. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, CARDIOVASCULAR SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • CSII's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 51.67%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • CARDIOVASCULAR SYSTEMS INC has improved earnings per share by 12.9% 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, CARDIOVASCULAR SYSTEMS INC continued to lose money by earning -$1.04 versus -$1.24 in the prior year. For the next year, the market is expecting a contraction of 29.8% in earnings (-$1.35 versus -$1.04).
  • The gross profit margin for CARDIOVASCULAR SYSTEMS INC is currently very high, coming in at 73.75%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -17.89% is in-line with the industry average.
  • Net operating cash flow has increased to -$7.27 million or 14.86% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -28.79%.

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