Strong On High Relative Volume: Spectranetics (SPNC)

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

  • SPNC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $17.8 million.
  • SPNC has traded 207,809 shares today.
  • SPNC is trading at 10.00 times the normal volume for the stock at this time of day.
  • SPNC 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. EXCLUSIVE OFFER: Get the inside scoop on opportunities in SPNC with the Ticky from Trade-Ideas. See the FREE profile for SPNC NOW at Trade-Ideas More details on SPNC: The Spectranetics Corporation, together with its subsidiaries, develops, manufactures, markets, and distributes single-use medical devices used in minimally invasive procedures in the cardiovascular system. Currently there are 7 analysts that rate Spectranetics a buy, no analysts rate it a sell, and 2 rate it a hold. The average volume for Spectranetics has been 617,700 shares per day over the past 30 days. Spectranetics has a market cap of $712.2 million and is part of the health care sector and health services industry. The stock has a beta of 1.35 and a short float of 21.7% with 8.06 days to cover. Shares are up 12.9% year-to-date as of the close of trading on Friday. EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE. TheStreetRatings.com Analysis: TheStreet Quant Ratings rates Spectranetics as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and generally high debt management risk. Highlights from the ratings report include:
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, SPECTRANETICS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$16.69 million or 120.31% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The debt-to-equity ratio is very high at 2.63 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, SPNC has managed to keep a strong quick ratio of 2.01, which demonstrates the ability to cover short-term cash needs.
  • SPNC's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 36.12%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • SPECTRANETICS CORP has improved earnings per share by 34.2% in the most recent quarter compared to 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, SPECTRANETICS CORP reported poor results of -$1.41 versus -$0.98 in the prior year. This year, the market expects an improvement in earnings (-$1.08 versus -$1.41).

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