Trade-Ideas: Insulet (PODD) 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.

Trade-Ideas LLC identified Insulet ( PODD) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Insulet as such a stock due to the following factors:

  • PODD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $32.2 million.
  • PODD has traded 639,929 shares today.
  • PODD is up 5.8% today.
  • PODD was down 9.6% yesterday.

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

More details on PODD:

Insulet Corporation develops, manufactures, and sells insulin infusion systems for people with insulin-dependent diabetes in the United States. Currently there are 6 analysts that rate Insulet a buy, no analysts rate it a sell, and 9 rate it a hold.

The average volume for Insulet has been 774,100 shares per day over the past 30 days. Insulet has a market cap of $1.7 billion and is part of the health care sector and health services industry. The stock has a beta of 1.31 and a short float of 9.4% with 4.40 days to cover. Shares are down 41.5% year-to-date as of the close of trading on Friday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Insulet as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally high debt management risk, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income has significantly decreased by 116.0% when compared to the same quarter one year ago, falling from -$2.50 million to -$5.40 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, INSULET CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The debt-to-equity ratio is very high at 2.08 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 4.31, which shows the ability to cover short-term cash needs.
  • The share price of INSULET CORP has not done very well: it is down 20.68% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.
  • INSULET CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, INSULET CORP reported poor results of -$0.93 versus -$0.83 in the prior year. This year, the market expects an improvement in earnings (-$0.19 versus -$0.93).

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

More from Markets

Netflix Tanks After Weak Subscriber Growth in 'Strong but not Stellar' Q2

Netflix Tanks After Weak Subscriber Growth in 'Strong but not Stellar' Q2

Global Fund Managers Bearish on Trade War Concerns, Still Love Tech -BAML Survey

Global Fund Managers Bearish on Trade War Concerns, Still Love Tech -BAML Survey

Netflix, Amazon, Jerome Powell, Walmart and Microsoft - 5 Things You Must Know

Netflix, Amazon, Jerome Powell, Walmart and Microsoft - 5 Things You Must Know

Stocks Drift, Oil Steadies, Dollar Dips as Investors Question Growth Prospects

Stocks Drift, Oil Steadies, Dollar Dips as Investors Question Growth Prospects

Jerome Powell Heads to Capitol Hill as Market's Best Recession Gauge Blinks Red

Jerome Powell Heads to Capitol Hill as Market's Best Recession Gauge Blinks Red