Strong On High Relative Volume: Intercept Pharmaceuticals (ICPT)
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
(
) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Intercept Pharmaceuticals as such a stock due to the following factors:
- ICPT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $101.4 million.
- ICPT has traded 172,697 shares today.
- ICPT is trading at 2.10 times the normal volume for the stock at this time of day.
- ICPT is trading at a new high 5.04% 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 ICPT:
Intercept Pharmaceuticals, Inc., a development stage biopharmaceutical company, focuses on the development and commercialization of novel therapeutics to treat chronic liver and intestinal diseases utilizing its proprietary bile acid chemistry. Currently there are 8 analysts that rate Intercept Pharmaceuticals a buy, 1 analyst rates it a sell, and 1 rates it a hold.
The average volume for Intercept Pharmaceuticals has been 536,900 shares per day over the past 30 days. Intercept has a market cap of $4.8 billion and is part of the health care sector and drugs industry. The stock has a beta of -9.44 and a short float of 27.3% with 6.90 days to cover. Shares are up 58.6% year-to-date as of the close of trading on Tuesday.
Analysis:
rates Intercept Pharmaceuticals as a
. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, feeble growth in its earnings per share and generally disappointing historical performance in the stock itself.
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 Biotechnology industry. The net income has decreased by 12.9% when compared to the same quarter one year ago, dropping from -$31.74 million to -$35.84 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 Biotechnology industry and the overall market, INTERCEPT PHARMA INC'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 -$23.87 million or 270.77% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- INTERCEPT PHARMA INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, INTERCEPT PHARMA INC reported poor results of -$3.70 versus -$2.28 in the prior year. For the next year, the market is expecting a contraction of 283.2% in earnings (-$14.18 versus -$3.70).
- Looking at the price performance of ICPT's shares over the past 12 months, there is not much good news to report: the stock is down 46.06%, 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.
- You can view the full Intercept Pharmaceuticals Ratings Report.
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