Perilous Reversal Watch: OSI Systems (OSIS)

Trade-Ideas LLC identified OSI Systems ( OSIS) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified OSI Systems as such a stock due to the following factors:

  • OSIS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.5 million.
  • OSIS has traded 75,948 shares today.
  • OSIS is down 3.1% today.
  • OSIS was up 9.1% yesterday.

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More details on OSIS:

OSI Systems, Inc., together with its subsidiaries, engages in the design, manufacture, and sale of specialized electronic systems and components worldwide. The company operates in three segments: Security, Healthcare, and Optoelectronics and Manufacturing. OSIS has a PE ratio of 25. Currently there are 5 analysts that rate OSI Systems a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for OSI Systems has been 236,700 shares per day over the past 30 days. OSI Systems has a market cap of $995.4 million and is part of the industrial goods sector and industrial industry. The stock has a beta of 0.99 and a short float of 4.7% with 3.66 days to cover. Shares are down 35.2% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates OSI Systems as a hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • 40.11% is the gross profit margin for OSI SYSTEMS INC which we consider to be strong. 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 4.43% trails the industry average.
  • OSIS's debt-to-equity ratio is very low at 0.25 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that OSIS's debt-to-equity ratio is low, the quick ratio, which is currently 0.63, displays a potential problem in covering short-term cash needs.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, OSI SYSTEMS INC's return on equity is below that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $20.68 million or 22.68% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, OSI SYSTEMS INC has marginally lower results.

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