Today's Water-Logged And Getting Wetter Stock: Exact (EXAS)

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 Exact ( EXAS) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Exact as such a stock due to the following factors:

  • EXAS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $50.8 million.
  • EXAS has traded 2.6 million shares today.
  • EXAS traded in a range 228.7% of the normal price range with a price range of $2.98.
  • EXAS traded below its daily resistance level (quality: 2 days, meaning that the stock is crossing a resistance level set by the last 2 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on EXAS:

Exact Sciences Corporation, a molecular diagnostics company, focuses on developing non-invasive colorectal cancer screening products. Currently there are 8 analysts that rate Exact a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for Exact has been 1.4 million shares per day over the past 30 days. Exact has a market cap of $2.8 billion and is part of the health care sector and health services industry. The stock has a beta of 0.61 and a short float of 37.7% with 17.14 days to cover. Shares are up 13% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Exact as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and poor profit margins.

Highlights from the ratings report include:
  • EXACT SCIENCES CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, EXACT SCIENCES CORP reported poor results of -$1.24 versus -$0.69 in the prior year. For the next year, the market is expecting a contraction of 40.3% in earnings (-$1.74 versus -$1.24).
  • 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 Biotechnology industry. The net income has significantly decreased by 122.3% when compared to the same quarter one year ago, falling from -$16.11 million to -$35.80 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. Compared to other companies in the Biotechnology industry and the overall market, EXACT SCIENCES CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$34.50 million or 179.33% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The gross profit margin for EXACT SCIENCES CORP is rather low; currently it is at 17.67%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, EXAS's net profit margin of -839.21% significantly underperformed when compared to the industry average.

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