XOMA (XOMA): Today's Weak On High Volume Stock
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.
Trade-Ideas LLC identified
(
) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified XOMA as such a stock due to the following factors:
- XOMA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.8 million.
- XOMA has traded 291,117 shares today.
- XOMA is trading at 2.64 times the normal volume for the stock at this time of day.
- XOMA is trading at a new low 3.01% 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 XOMA:
XOMA Corporation discovers and develops antibody-based therapeutics in the United States, Europe, and the Asia Pacific. Currently there are 6 analysts that rate XOMA a buy, no analysts rate it a sell, and none rate it a hold.
The average volume for XOMA has been 2.4 million shares per day over the past 30 days. XOMA has a market cap of $481.0 million and is part of the health care sector and drugs industry. The stock has a beta of 4.14 and a short float of 24.2% with 4.78 days to cover. Shares are up 11.1% year-to-date as of the close of trading on Friday.
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Analysis:
rates XOMA as a
. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and generally high debt management risk.
Highlights from the ratings report include:
- XOMA'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 34.29%, 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.
- The debt-to-equity ratio is very high at 11.47 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, XOMA has managed to keep a strong quick ratio of 2.24, which demonstrates the ability to cover short-term cash needs.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Biotechnology industry average, but is greater than that of the S&P 500. The net income increased by 86.0% when compared to the same quarter one year prior, rising from -$52.30 million to -$7.32 million.
- XOMA, with its very weak revenue results, has greatly underperformed against the industry average of 34.7%. Since the same quarter one year prior, revenues plummeted by 65.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- Compared to other companies in the Biotechnology industry and the overall market, XOMA CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full XOMA Ratings Report.
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