Trade-Ideas: Merit Medical Systems (MMSI) Is Today's Strong On High Relative Volume Stock

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

  • MMSI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.0 million.
  • MMSI has traded 106,863 shares today.
  • MMSI is trading at 3.46 times the normal volume for the stock at this time of day.
  • MMSI is trading at a new high 3.00% 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 MMSI:

Merit Medical Systems, Inc. designs, develops, manufactures, and markets medical devices for interventional and diagnostic procedures worldwide. MMSI has a PE ratio of 34. Currently there are 3 analysts that rate Merit Medical Systems a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Merit Medical Systems has been 228,000 shares per day over the past 30 days. Merit Medical Systems has a market cap of $802.1 million and is part of the health care sector and health services industry. The stock has a beta of 1.07 and a short float of 5.3% with 10.49 days to cover. Shares are down 1.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Merit Medical Systems as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • MMSI's revenue growth trails the industry average of 29.6%. Since the same quarter one year prior, revenues slightly increased by 4.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The current debt-to-equity ratio, 0.45, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.94 is somewhat weak and could be cause for future problems.
  • MERIT MEDICAL SYSTEMS INC's earnings per share declined by 30.0% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, MERIT MEDICAL SYSTEMS INC's EPS of $0.54 remained unchanged from the prior years' EPS of $0.54. This year, the market expects an improvement in earnings ($0.98 versus $0.54).
  • The gross profit margin for MERIT MEDICAL SYSTEMS INC is rather high; currently it is at 50.57%. Regardless of MMSI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MMSI's net profit margin of 4.63% is significantly lower than the industry average.

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