OvaScience (OVAS) Weak On High Volume Today

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

  • OVAS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.4 million.
  • OVAS has traded 127,607 shares today.
  • OVAS is trading at 2.09 times the normal volume for the stock at this time of day.
  • OVAS is trading at a new low 3.00% 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 OVAS:

OvaScience, Inc., a fertility company, discovers, develops, and commercializes new fertility treatment options for women worldwide. Currently there are 2 analysts that rate OvaScience a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for OvaScience has been 577,300 shares per day over the past 30 days. OvaScience has a market cap of $149.2 million and is part of the health care sector and drugs industry. The stock has a beta of 4.60 and a short float of 36% with 10.17 days to cover. Shares are down 42.1% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates OvaScience as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • OVASCIENCE INC's earnings per share declined by 23.1% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, OVASCIENCE INC reported poor results of -$2.71 versus -$2.16 in the prior year. For the next year, the market is expecting a contraction of 16.6% in earnings (-$3.16 versus -$2.71).
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Biotechnology industry average. The net income has significantly decreased by 26.4% when compared to the same quarter one year ago, falling from -$17.21 million to -$21.76 million.
  • 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 Biotechnology industry and the overall market, OVASCIENCE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has declined marginally to -$15.41 million or 7.05% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Looking at the price performance of OVAS's shares over the past 12 months, there is not much good news to report: the stock is down 79.80%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier 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.

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