Trade-Ideas: Mindray Medical International (MR) Is Today's Weak On High Relative 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.

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

  • MR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.1 million.
  • MR has traded 93,812 shares today.
  • MR is trading at 4.52 times the normal volume for the stock at this time of day.
  • MR is trading at a new low 6.10% 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 MR:

Mindray Medical International Limited develops, manufactures, and markets medical devices worldwide. The company operates in three segments: Patient Monitoring and Life Support Products, In-Vitro Diagnostic Products, and Medical Imaging Systems. The stock currently has a dividend yield of 1.2%. MR has a PE ratio of 15.9. Currently there are 2 analysts that rate Mindray Medical International a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Mindray Medical International has been 618,100 shares per day over the past 30 days. Mindray Medical International has a market cap of $3.6 billion and is part of the health care sector and health services industry. Shares are up 16.5% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Mindray Medical International as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • MR's revenue growth has slightly outpaced the industry average of 1.1%. Since the same quarter one year prior, revenues slightly increased by 8.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • MR's debt-to-equity ratio is very low at 0.17 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 2.57, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for MINDRAY MEDICAL INTL is rather high; currently it is at 58.71%. Regardless of MR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 13.03% trails the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Health Care Equipment & Supplies industry average. The net income has significantly decreased by 30.9% when compared to the same quarter one year ago, falling from $75.22 million to $51.99 million.
  • 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. In comparison to the other companies in the Health Care Equipment & Supplies industry and the overall market, MINDRAY MEDICAL INTL's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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