Today's Dead Cat Bounce Stock: Fonar Corporation (FONR)

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 Fonar Corporation ( FONR) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Fonar Corporation as such a stock due to the following factors:

  • FONR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.7 million.
  • FONR has traded 206,454 shares today.
  • FONR is up 3.1% today.
  • FONR was down 10.3% yesterday.

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More details on FONR:

Fonar Corporation is engaged in the design, manufacture, sale, and servicing of magnetic resonance imaging (MRI) scanners for the detection and diagnosis of human diseases, abnormalities, injuries, and other medical conditions. FONR has a PE ratio of 16.4.

The average volume for Fonar Corporation has been 339,000 shares per day over the past 30 days. Fonar has a market cap of $146.5 million and is part of the health care sector and health services industry. The stock has a beta of 1.22 and a short float of 2.5% with 0.26 days to cover. Shares are up 3.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Fonar Corporation as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • FONR's very impressive revenue growth greatly exceeded the industry average of 3.5%. Since the same quarter one year prior, revenues leaped by 77.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 68.18% and other important driving factors, this stock has surged by 419.70% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, FONR should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • FONAR CORP reported significant earnings per share improvement 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. During the past fiscal year, FONAR CORP increased its bottom line by earning $1.34 versus $0.90 in the prior year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income increased by 67.8% when compared to the same quarter one year prior, rising from $1.45 million to $2.44 million.
  • Net operating cash flow has significantly increased by 136.31% to $3.86 million when compared to the same quarter last year. In addition, FONAR CORP has also vastly surpassed the industry average cash flow growth rate of -44.41%.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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