Trade-Ideas: DexCom (DXCM) Is Today's

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 DexCom ( DXCM) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified DexCom as such a stock due to the following factors:

  • DXCM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $30.9 million.
  • DXCM has traded 105,088 shares today.
  • DXCM traded in a range 205.5% of the normal price range with a price range of $2.82.
  • DXCM traded above its daily resistance level (quality: 133 days, meaning that the stock is crossing a resistance level set by the last 133 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in DXCM with the Ticky from Trade-Ideas. See the FREE profile for DXCM NOW at Trade-Ideas

More details on DXCM:

DexCom, Inc., a medical device company, focuses on the design, development, and commercialization of continuous glucose monitoring systems. Currently there are 9 analysts that rate DexCom a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for DexCom has been 729,000 shares per day over the past 30 days. DexCom has a market cap of $2.9 billion and is part of the health care sector and health services industry. The stock has a beta of 0.20 and a short float of 5.8% with 6.64 days to cover. Shares are up 8.5% year-to-date as of the close of trading on Tuesday.

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 DexCom as a sell. Among the areas we feel are negative, one of the most important has been unimpressive growth in net income over time.

Highlights from the ratings report include:
  • The change in net income from the same quarter one year ago has exceeded that of the Health Care Equipment & Supplies industry average, but is less than that of the S&P 500. The net income has decreased by 12.6% when compared to the same quarter one year ago, dropping from -$11.10 million to -$12.50 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, DEXCOM INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • DEXCOM INC's earnings per share declined by 6.3% 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, DEXCOM INC continued to lose money by earning -$0.42 versus -$0.79 in the prior year. This year, the market expects an improvement in earnings (-$0.32 versus -$0.42).
  • The gross profit margin for DEXCOM INC is rather high; currently it is at 67.30%. 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 -26.53% is in-line with the industry average.
  • Net operating cash flow has increased to -$2.40 million or 46.66% when compared to the same quarter last year. In addition, DEXCOM INC has also vastly surpassed the industry average cash flow growth rate of -30.55%.

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

null

More from Markets

Alphabet, Caterpillar, Coca-Cola and Amazon - 5 Things You Must Know

Alphabet, Caterpillar, Coca-Cola and Amazon - 5 Things You Must Know

Apple Suppliers Slide After European, Asian Chipmakers Echo Smartphone Concerns

Apple Suppliers Slide After European, Asian Chipmakers Echo Smartphone Concerns

Global Stocks Edge Higher, But Bond Yields, Oil Prices May Test Market Strength

Global Stocks Edge Higher, But Bond Yields, Oil Prices May Test Market Strength

SAP Shares Leap After Cloud Business Prompts Full-Year Guidance Upgrade

SAP Shares Leap After Cloud Business Prompts Full-Year Guidance Upgrade

Sohn Conference Briefly Distracts From Barrage of Earnings -- ICYMI

Sohn Conference Briefly Distracts From Barrage of Earnings -- ICYMI