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 Fusion-io ( FIO) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Fusion-io as such a stock due to the following factors:
- FIO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $67.5 million.
- FIO has traded 325,060 shares today.
- FIO is up 3.1% today.
- FIO was down 5.3% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in FIO with the Ticky from Trade-Ideas. See the FREE profile for FIO NOW at Trade-Ideas More details on FIO: Fusion-io, Inc. develops, markets, and sells storage memory platforms in the United States and internationally. Currently there are 4 analysts that rate Fusion-io a buy, 2 analysts rate it a sell, and 12 rate it a hold. The average volume for Fusion-io has been 3.1 million shares per day over the past 30 days. Fusion-io has a market cap of $1.2 billion and is part of the technology sector and computer hardware industry. The stock has a beta of 3.01 and a short float of 19.3% with 2.61 days to cover. Shares are up 23.5% year-to-date as of the close of trading on Friday. STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. TheStreetRatings.com Analysis: TheStreet Quant Ratings rates Fusion-io as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share. 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 Computers & Peripherals industry. The net income has significantly decreased by 1329.8% when compared to the same quarter one year ago, falling from $1.73 million to -$21.30 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 Computers & Peripherals industry and the overall market, FUSION-IO INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 42.22%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1100.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- FUSION-IO 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, FUSION-IO INC reported poor results of -$0.39 versus -$0.08 in the prior year. This year, the market expects an improvement in earnings (-$0.28 versus -$0.39).
- FIO, with its decline in revenue, underperformed when compared the industry average of 4.6%. Since the same quarter one year prior, revenues fell by 21.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full Fusion-io Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.