Trade-Ideas LLC identified

DexCom

(

DXCM

) as a weak on high relative volume 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 $68.3 million.
  • DXCM has traded 224,801 shares today.
  • DXCM is trading at 2.23 times the normal volume for the stock at this time of day.
  • DXCM is trading at a new low 3.01% 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 DXCM:

DexCom, Inc., a medical device company, focuses on the design, development, and commercialization of continuous glucose monitoring systems. Currently there are 13 analysts that rate DexCom a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for DexCom has been 717,300 shares per day over the past 30 days. DexCom has a market cap of $6.0 billion and is part of the health care sector and health services industry. The stock has a beta of 0.02 and a short float of 2.6% with 2.02 days to cover. Shares are down 10.6% year-to-date as of the close of trading on Wednesday.

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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 and disappointing return on equity.

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 717.3% when compared to the same quarter one year ago, falling from -$5.20 million to -$42.50 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. 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.
  • DEXCOM INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, DEXCOM INC continued to lose money by earning -$0.32 versus -$0.42 in the prior year. This year, the market expects an improvement in earnings (-$0.28 versus -$0.32).
  • The gross profit margin for DEXCOM INC is currently very high, coming in at 73.57%. 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 -40.39% is in-line with the industry average.
  • Net operating cash flow has significantly increased by 57.01% to $17.90 million when compared to the same quarter last year. In addition, DEXCOM INC has also vastly surpassed the industry average cash flow growth rate of -16.95%.

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