Castlight Health (CSLT) Is Today's Strong 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 Castlight Health ( CSLT) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Castlight Health as such a stock due to the following factors:

  • CSLT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.1 million.
  • CSLT has traded 727,929 shares today.
  • CSLT is trading at 14.27 times the normal volume for the stock at this time of day.
  • CSLT is trading at a new high 8.10% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 CSLT:

Castlight Health, Inc. provides cloud-based software in the United States. Its software enables enterprises to understand and manage health care spending. It offers Enterprise Healthcare Cloud that transforms external and internal complex data into transparent and useful information. Currently there are 3 analysts that rate Castlight Health a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Castlight Health has been 711,400 shares per day over the past 30 days. Castlight Health has a market cap of $297.0 million and is part of the technology sector and computer software & services industry. Shares are down 28.2% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Castlight Health as a sell. The area that we feel has been the company's primary weakness has been its deteriorating net income.

Highlights from the ratings report include:
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Health Care Technology industry average, but is greater than that of the S&P 500. The net income increased by 19.1% when compared to the same quarter one year prior, going from -$24.28 million to -$19.64 million.
  • CSLT's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 51.05%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter.
  • Compared to other companies in the Health Care Technology industry and the overall market, CASTLIGHT HEALTH INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to -$13.19 million or 17.88% when compared to the same quarter last year. Despite an increase in cash flow, CASTLIGHT HEALTH INC's cash flow growth rate is still lower than the industry average growth rate of 50.89%.
  • The gross profit margin for CASTLIGHT HEALTH INC is rather high; currently it is at 57.88%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -123.14% is in-line with the industry average.

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