RadNet (RDNT): Today's Weak On High 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 RadNet ( RDNT) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified RadNet as such a stock due to the following factors:

  • RDNT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.8 million.
  • RDNT has traded 81,525 shares today.
  • RDNT is trading at 4.64 times the normal volume for the stock at this time of day.
  • RDNT is trading at a new low 4.24% 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 RDNT:

RadNet, Inc. provides outpatient diagnostic imaging services in the United States. RDNT has a PE ratio of 293.0. Currently there are 3 analysts that rate RadNet a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for RadNet has been 325,600 shares per day over the past 30 days. RadNet has a market cap of $387.0 million and is part of the health care sector and health services industry. The stock has a beta of 1.76 and a short float of 3.1% with 2.23 days to cover. Shares are up 2.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates RadNet as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, notable return on equity and increase in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:
  • Compared to its price level of one year ago, RDNT is up 57.16% to its most recent closing price of 8.55. Looking ahead, our view is that this company's fundamentals should not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • Compared to other companies in the Health Care Providers & Services industry and the overall market, RADNET INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • RADNET INC reported significant earnings per share improvement 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, RADNET INC reported lower earnings of $0.00 versus $0.06 in the prior year. This year, the market expects an increase in earnings to $0.54 from $0.00.
  • 39.00% is the gross profit margin for RADNET INC which we consider to be strong. Regardless of RDNT'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 2.26% trails the industry average.
  • The debt-to-equity ratio is very high at 111.45 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, RDNT's quick ratio is somewhat strong at 1.13, demonstrating the ability to handle short-term liquidity needs.

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