Sequenom (SQNM) Strong On High Relative 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 Sequenom ( SQNM) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Sequenom as such a stock due to the following factors:

  • SQNM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.7 million.
  • SQNM has traded 355,362 shares today.
  • SQNM is trading at 3.36 times the normal volume for the stock at this time of day.
  • SQNM is trading at a new high 3.12% 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 SQNM:

Sequenom, Inc., a life sciences company, develops and commercializes molecular diagnostics testing services for the women's health and oncology markets in the United States and internationally. SQNM has a PE ratio of 23. Currently there are 3 analysts that rate Sequenom a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Sequenom has been 1.6 million shares per day over the past 30 days. Sequenom has a market cap of $346.0 million and is part of the health care sector and drugs industry. The stock has a beta of -0.70 and a short float of 15.9% with 14.92 days to cover. Shares are down 22.2% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Sequenom as a sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • SQNM has underperformed the S&P 500 Index, declining 16.45% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • SEQUENOM INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, SEQUENOM INC continued to lose money by earning -$0.14 versus -$0.95 in the prior year. For the next year, the market is expecting a contraction of 39.3% in earnings (-$0.20 versus -$0.14).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Life Sciences Tools & Services industry. The net income increased by 191.1% when compared to the same quarter one year prior, rising from -$15.67 million to $14.28 million.
  • The gross profit margin for SEQUENOM INC is rather high; currently it is at 56.58%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 37.78% significantly outperformed against the industry average.
  • Net operating cash flow has increased to -$7.20 million or 45.35% when compared to the same quarter last year. In addition, SEQUENOM INC has also vastly surpassed the industry average cash flow growth rate of -17.70%.

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