Cutera (CUTR) Is Strong On High Volume Today

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

  • CUTR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.7 million.
  • CUTR has traded 112,094 shares today.
  • CUTR is trading at 3.54 times the normal volume for the stock at this time of day.
  • CUTR is trading at a new high 3.04% 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 CUTR:

Cutera, Inc., a medical device company, designs, develops, manufactures, markets, and services laser and other energy based aesthetics systems for practitioners worldwide. Currently there are 4 analysts that rate Cutera a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Cutera has been 74,100 shares per day over the past 30 days. Cutera has a market cap of $231.0 million and is part of the health care sector and health services industry. The stock has a beta of 0.38 and a short float of 0.6% with 0.30 days to cover. Shares are up 46.4% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Cutera as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 65.97% over the past year, a rise that has exceeded that of the S&P 500 Index. 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.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 21.4%. Since the same quarter one year prior, revenues rose by 17.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CUTERA INC's earnings per share improvement from the most recent quarter was slightly positive. 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, CUTERA INC reported poor results of -$0.74 versus -$0.32 in the prior year. This year, the market expects an improvement in earnings (-$0.29 versus -$0.74).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Health Care Equipment & Supplies industry average, but is greater than that of the S&P 500. The net income has decreased by 0.9% when compared to the same quarter one year ago, dropping from -$3.61 million to -$3.64 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, CUTERA INC's return on equity significantly trails that of both the industry average and the S&P 500.

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