Trade-Ideas LLC identified

Hologic

(

HOLX

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

  • HOLX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $91.6 million.
  • HOLX has traded 1.9 million shares today.
  • HOLX is trading at 11.46 times the normal volume for the stock at this time of day.
  • HOLX is trading at a new low 9.00% 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 HOLX:

Hologic, Inc. develops, manufactures, and supplies diagnostics products, medical imaging systems, and surgical products for women in the United States, Europe, the Asia-Pacific, and internationally. HOLX has a PE ratio of 79. Currently there are 10 analysts that rate Hologic a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Hologic has been 2.2 million shares per day over the past 30 days. Hologic has a market cap of $10.3 billion and is part of the health care sector and health services industry. The stock has a beta of 0.81 and a short float of 6.1% with 3.70 days to cover. Shares are down 5.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Hologic as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:

  • HOLX's revenue growth trails the industry average of 29.7%. Since the same quarter one year prior, revenues slightly increased by 6.4%. 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 significantly increased by 76.53% to $232.50 million when compared to the same quarter last year. In addition, HOLOGIC INC has also vastly surpassed the industry average cash flow growth rate of -16.95%.
  • HOLOGIC INC's earnings per share declined by 10.0% in the most recent quarter compared to 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, HOLOGIC INC increased its bottom line by earning $0.46 versus $0.06 in the prior year. This year, the market expects an improvement in earnings ($1.82 versus $0.46).
  • 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 Health Care Equipment & Supplies industry and the overall market, HOLOGIC INC's return on equity is below that of both the industry average and the S&P 500.
  • Currently the debt-to-equity ratio of 1.77 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, HOLX maintains a poor quick ratio of 0.96, which illustrates the inability to avoid short-term cash problems.

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