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

  • LDRH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.0 million.
  • LDRH has traded 218,379 shares today.
  • LDRH is trading at 8.67 times the normal volume for the stock at this time of day.
  • LDRH is trading at a new low 7.07% 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 LDRH:

LDR Holding Corporation designs, manufactures, and markets surgical implants, devices, and instrumentation for the treatment of spine disorders in the United States, France, and internationally. Currently there are 3 analysts that rate LDR a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for LDR has been 221,100 shares per day over the past 30 days. LDR has a market cap of $917.2 million and is part of the health care sector and health services industry. Shares are up 48.9% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates LDR as a sell. The area that we feel has been the company's primary weakness has been its poor profit margins.

Highlights from the ratings report include:
  • The gross profit margin for LDR HOLDING CORP is currently very high, coming in at 85.42%. Regardless of LDRH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LDRH's net profit margin of -5.62% significantly underperformed when compared to the industry average.
  • Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, LDR HOLDING CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • LDRH's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.11, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has fallen to -$1.19 million from having none in the same quarter last year. Since the company had no net operating cash flow for the prior period, we cannot calculate a percent change in order to compare its growth rate with that of its industry average.
  • This stock has increased by 56.06% over the past year, outperforming the rise in the S&P 500 Index during the same period. Despite the fact that the stock's value has already enjoyed nice gains in the past year, we feel that the risks surrounding an investment in this stock outweigh any potential future returns.

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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