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

  • HQY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.6 million.
  • HQY has traded 56,364 shares today.
  • HQY is trading at 5.78 times the normal volume for the stock at this time of day.
  • HQY is trading at a new low 8.20% 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.

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More details on HQY:

HealthEquity, Inc. provides various solutions for managing health care accounts, health reimbursement arrangements, and flexible spending accounts for health plans, insurance companies, and third-party administrators in the United States. HQY has a PE ratio of 145. Currently there are 7 analysts that rate HealthEquity a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for HealthEquity has been 326,400 shares per day over the past 30 days. HealthEquity has a market cap of $1.9 billion and is part of the technology sector and computer software & services industry. Shares are up 31.7% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates HealthEquity as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the stock itself is trading at a premium valuation.

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 44.71% over the past year, a rise that has exceeded that of the S&P 500 Index.
  • The revenue growth greatly exceeded the industry average of 10.1%. Since the same quarter one year prior, revenues rose by 46.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • HQY has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 22.18, which clearly demonstrates the ability to cover short-term cash needs.
  • When compared to other companies in the Health Care Providers & Services industry and the overall market, HEALTHEQUITY INC's return on equity is below that of both the industry average and the S&P 500.

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