Illumina (ILMN) Highlighted As Weak On High Volume

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

  • ILMN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $216.0 million.
  • ILMN has traded 302,426 shares today.
  • ILMN is trading at 2.41 times the normal volume for the stock at this time of day.
  • ILMN is trading at a new low 3.00% 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.

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

More details on ILMN:

Illumina, Inc. provides sequencing and array-based solutions for genetic analysis in North America, Europe, Latin America, the Asia-Pacific, the Middle East, and South Africa. ILMN has a PE ratio of 72. Currently there are 12 analysts that rate Illumina a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Illumina has been 1.2 million shares per day over the past 30 days. Illumina has a market cap of $30.0 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.30 and a short float of 2.7% with 3.61 days to cover. Shares are up 13.9% 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 Illumina 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 good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 3.0%. Since the same quarter one year prior, revenues rose by 28.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.80, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, ILMN has a quick ratio of 2.42, which demonstrates the ability of the company to cover short-term liquidity 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. When compared to other companies in the Life Sciences Tools & Services industry and the overall market, ILLUMINA INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • The gross profit margin for ILLUMINA INC is currently very high, coming in at 75.22%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 25.37% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 80.06% to $66.78 million when compared to the same quarter last year. In addition, ILLUMINA INC has also vastly surpassed the industry average cash flow growth rate of -7.50%.

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.

If you liked this article you might like

Jim Cramer: The 3 Best Sectors That Lifted the Stock Market

Jim Cramer: The 3 Best Sectors That Lifted the Stock Market

Cramer: Lessons From the Market and ICR

Cramer: Lessons From the Market and ICR

Six Off the Beaten Path Healthcare Stock Gems

Six Off the Beaten Path Healthcare Stock Gems

16 Amazing Stocks to Trade in This Unstoppable Bull Market

16 Amazing Stocks to Trade in This Unstoppable Bull Market

Roku, Nucana and Other IPOs That Should Be on Your Radar in 2017

Roku, Nucana and Other IPOs That Should Be on Your Radar in 2017