Novadaq Technologies (NVDQ) Weak On High Volume

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

  • NVDQ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.5 million.
  • NVDQ has traded 89,725 shares today.
  • NVDQ is trading at 8.50 times the normal volume for the stock at this time of day.
  • NVDQ is trading at a new low 3.01% 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 NVDQ:

Novadaq Technologies Inc. develops, manufactures, and commercializes fluorescence imaging products and therapeutic devices for use by surgeons in the operating room and other clinical settings where open and minimally invasive surgery or interventional procedures are performed. Currently there are 8 analysts that rate Novadaq Technologies a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Novadaq Technologies has been 434,200 shares per day over the past 30 days. Novadaq has a market cap of $734.5 million and is part of the health care sector and health services industry. Shares are down 5.3% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Novadaq Technologies as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • Net operating cash flow has significantly decreased to -$7.61 million or 118.35% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • NVDQ has underperformed the S&P 500 Index, declining 17.82% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • 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, NOVADAQ TECHNOLOGIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • NOVADAQ TECHNOLOGIES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, NOVADAQ TECHNOLOGIES INC reported poor results of -$0.47 versus -$0.34 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 164.5% when compared to the same quarter one year prior, rising from -$9.74 million to $6.28 million.

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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