Volcano Corporation (VOLC) Trading With Heavy Volume Before Market Open

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Volcano Corporation ( VOLC) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Volcano Corporation as such a stock due to the following factors:

  • VOLC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.1 million.
  • VOLC traded 79,504 shares today in the pre-market hours as of 8:09 AM, representing 19.9% of its average daily volume.

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More details on VOLC:

Volcano Corporation designs, develops, manufactures, and commercializes a suite of precision guided therapy tools primarily to physicians, nurses, and technicians worldwide. Currently there are 11 analysts that rate Volcano Corporation a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Volcano Corporation has been 597,100 shares per day over the past 30 days. Volcano has a market cap of $1.3 billion and is part of the health care sector and health services industry. The stock has a beta of -0.12 and a short float of 12.3% with 16.58 days to cover. Shares are down 1.6% year to date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Volcano Corporation 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 feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 26.9%. Since the same quarter one year prior, revenues slightly increased by 6.3%. 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.
  • VOLC's debt-to-equity ratio of 0.95 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 7.66 is very high and demonstrates very strong liquidity.
  • The gross profit margin for VOLCANO CORP is rather high; currently it is at 69.65%. Regardless of VOLC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, VOLC's net profit margin of -2.35% significantly underperformed when compared to the industry average.
  • 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 172.4% when compared to the same quarter one year ago, falling from $3.30 million to -$2.39 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, VOLCANO CORP's return on equity significantly trails that of both the industry average and the S&P 500.

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