Stratasys (SSYS): Today's Weak On High Volume Stock

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

  • SSYS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $122.5 million.
  • SSYS has traded 292,724 shares today.
  • SSYS is trading at 6.04 times the normal volume for the stock at this time of day.
  • SSYS is trading at a new low 10.06% 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 SSYS:

Stratasys Ltd. provides additive manufacturing (AM) solutions for the creation of parts used in the processes of designing and manufacturing products and for the direct manufacture of end parts. Currently there are 14 analysts that rate Stratasys a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Stratasys has been 1.0 million shares per day over the past 30 days. Stratasys has a market cap of $6.1 billion and is part of the technology sector and computer hardware industry. The stock has a beta of 0.44 and a short float of 13.1% with 5.16 days to cover. Shares are down 10% 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 Stratasys as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, compelling growth in net income, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • SSYS's very impressive revenue growth greatly exceeded the industry average of 13.6%. Since the same quarter one year prior, revenues leaped by 67.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • SSYS has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.58, which clearly demonstrates the ability to cover short-term cash needs.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Computers & Peripherals industry. The net income increased by 93.8% when compared to the same quarter one year prior, rising from -$2.80 million to -$0.17 million.
  • The gross profit margin for STRATASYS LTD is rather high; currently it is at 65.48%. 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 -0.09% is in-line with the industry average.
  • STRATASYS LTD reported significant earnings per share improvement 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, STRATASYS LTD swung to a loss, reporting -$0.70 versus $0.43 in the prior year. This year, the market expects an improvement in earnings ($2.30 versus -$0.70).

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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