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 $8.8 million.
  • HQY has traded 95,867 shares today.
  • HQY is trading at 3.05 times the normal volume for the stock at this time of day.
  • HQY is trading at a new low 5.06% 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 107. 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 327,400 shares per day over the past 30 days. HealthEquity has a market cap of $1.5 billion and is part of the technology sector and computer software & services industry. Shares are up 2.5% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates HealthEquity as a sell. Among the areas we feel are negative, one of the most important has been premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:
  • After a year of stock price fluctuations, the net result is that HQY's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
  • 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.
  • 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 14.42, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for HEALTHEQUITY INC is rather high; currently it is at 63.27%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 13.37% significantly outperformed against the industry average.

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