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.

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

  • CSII has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.9 million.
  • CSII has traded 132,681 shares today.
  • CSII is trading at 12.17 times the normal volume for the stock at this time of day.
  • CSII is trading at a new low 6.00% 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 CSII:

Cardiovascular Systems, Inc., a medical device company, focuses on developing and commercializing minimally invasive treatment solutions for vascular diseases. Currently there are 6 analysts that rate Cardiovascular Systems a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Cardiovascular Systems has been 223,200 shares per day over the past 30 days. Cardiovascular Systems has a market cap of $1.1 billion and is part of the health care sector and health services industry. The stock has a beta of 2.23 and a short float of 7.1% with 8.10 days to cover. Shares are up 14.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Cardiovascular Systems as a sell. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity.

Highlights from the ratings report include:
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, CARDIOVASCULAR SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Health Care Equipment & Supplies industry average, but is greater than that of the S&P 500. The net income increased by 39.1% when compared to the same quarter one year prior, rising from -$8.66 million to -$5.27 million.
  • CARDIOVASCULAR SYSTEMS INC has improved earnings per share by 46.9% 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, CARDIOVASCULAR SYSTEMS INC reported poor results of -$1.24 versus -$1.11 in the prior year. This year, the market expects an improvement in earnings (-$1.07 versus -$1.24).
  • The gross profit margin for CARDIOVASCULAR SYSTEMS INC is currently very high, coming in at 80.06%. 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 -11.78% is in-line with the industry average.
  • Net operating cash flow has slightly increased to -$6.64 million or 3.30% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -8.80%.

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