Weak On High Volume: Quidel (QDEL) - TheStreet

Trade-Ideas LLC identified

Quidel

(

QDEL

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

  • QDEL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.9 million.
  • QDEL has traded 55,548 shares today.
  • QDEL is trading at 6.35 times the normal volume for the stock at this time of day.
  • QDEL is trading at a new low 3.09% 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 QDEL:

Quidel Corporation develops, manufactures, and markets diagnostic testing solutions for applications primarily in infectious diseases, women's health, and gastrointestinal diseases. Currently there are 4 analysts that rate Quidel a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Quidel has been 227,400 shares per day over the past 30 days. Quidel has a market cap of $582.7 million and is part of the health care sector and drugs industry. The stock has a beta of 0.68 and a short float of 23.7% with 11.46 days to cover. Shares are down 29.5% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Quidel as a

hold

. 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 and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • QDEL's revenue growth trails the industry average of 35.9%. Since the same quarter one year prior, revenues rose by 10.8%. 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.
  • The debt-to-equity ratio is somewhat low, currently at 0.63, 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 6.58, which clearly demonstrates the ability to cover short-term cash needs.
  • 49.21% is the gross profit margin for QUIDEL CORP which we consider to be strong. 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 -25.61% is in-line with the industry average.
  • Net operating cash flow has significantly decreased to -$8.50 million or 74.79% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Health Care Equipment & Supplies industry average. The net income has significantly decreased by 29.3% when compared to the same quarter one year ago, falling from -$6.91 million to -$8.93 million.

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