Trade-Ideas LLC identified DexCom ( DXCM) 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 DexCom as such a stock due to the following factors:

  • DXCM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $36.3 million.
  • DXCM has traded 389,517 shares today.
  • DXCM traded in a range 207.9% of the normal price range with a price range of $6.36.
  • DXCM traded below its daily resistance level (quality: 300 days, meaning that the stock is crossing a resistance level set by the last 300 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 DXCM:

DexCom, Inc., a medical device company, focuses on the design, development, and commercialization of continuous glucose monitoring systems. Currently there are 13 analysts that rate DexCom a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for DexCom has been 679,700 shares per day over the past 30 days. DexCom has a market cap of $5.7 billion and is part of the health care sector and health services industry. The stock has a beta of 0.25 and a short float of 2.6% with 3.59 days to cover. Shares are down 13.8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates DexCom as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • 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 Health Care Equipment & Supplies industry. The net income has significantly decreased by 717.3% when compared to the same quarter one year ago, falling from -$5.20 million to -$42.50 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, DEXCOM INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Looking at where the stock is today compared to one year ago, we find that it is higher, and it has outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • DEXCOM INC 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. 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, DEXCOM INC continued to lose money by earning -$0.32 versus -$0.42 in the prior year. This year, the market expects an improvement in earnings (-$0.28 versus -$0.32).
  • The gross profit margin for DEXCOM INC is currently very high, coming in at 73.57%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -40.39% is in-line with the industry average.

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