Abiomed (ABMD) Weak On High Volume Today

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

  • ABMD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $59.2 million.
  • ABMD has traded 162,599 shares today.
  • ABMD is trading at 3.92 times the normal volume for the stock at this time of day.
  • ABMD is trading at a new low 3.07% 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 ABMD:

ABIOMED, Inc. provides medical devices in circulatory support and continuum of care in heart recovery to acute heart failure patients. ABMD has a PE ratio of 27.9. Currently there are 4 analysts that rate Abiomed a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Abiomed has been 549,800 shares per day over the past 30 days. Abiomed has a market cap of $3.0 billion and is part of the health care sector and health services industry. The stock has a beta of 1.36 and a short float of 12.8% with 3.63 days to cover. Shares are up 94% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Abiomed 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, notable return on equity, expanding profit margins and solid stock price performance. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 1.2%. Since the same quarter one year prior, revenues rose by 34.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ABMD 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 4.17, which clearly demonstrates the ability to cover short-term cash needs.
  • 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, ABIOMED INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for ABIOMED INC is currently very high, coming in at 84.00%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 146.35% significantly outperformed against the industry average.
  • Powered by its strong earnings growth of 2388.88% and other important driving factors, this stock has surged by 239.49% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.

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