Strong On High Relative Volume: Amedisys (AMED)

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

  • AMED has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.2 million.
  • AMED has traded 178,338 shares today.
  • AMED is trading at 10.36 times the normal volume for the stock at this time of day.
  • AMED is trading at a new high 5.01% 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 AMED:

Amedisys, Inc., together with its subsidiaries, provides home health and hospice care services. It operates through two segments, Home Health and Hospice. The Home Health segment offers a range of services in the homes of individuals who may be recovering from illness, injury, or surgery. Currently there are 2 analysts that rate Amedisys a buy, 1 analyst rates it a sell, and 6 rate it a hold.

The average volume for Amedisys has been 225,100 shares per day over the past 30 days. Amedisys has a market cap of $1.4 billion and is part of the health care sector and health services industry. The stock has a beta of 0.42 and a short float of 4.5% with 2.64 days to cover. Shares are up 36.9% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Amedisys as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and good cash flow from operations. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, AMED's share price has jumped by 170.17%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • AMED's revenue growth trails the industry average of 13.1%. Since the same quarter one year prior, revenues slightly increased by 0.9%. 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.
  • AMED's debt-to-equity ratio is very low at 0.27 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that AMED's debt-to-equity ratio is low, the quick ratio, which is currently 0.69, displays a potential problem in covering 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 Providers & Services industry and the overall market, AMEDISYS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Health Care Providers & Services industry. The net income has significantly decreased by 181.9% when compared to the same quarter one year ago, falling from -$12.42 million to -$35.01 million.

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