Zogenix (ZGNX) Highlighted As Weak On High Volume
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 weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Zogenix as such a stock due to the following factors:
- ZGNX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.6 million.
- ZGNX has traded 7.7 million shares today.
- ZGNX is trading at 39.79 times the normal volume for the stock at this time of day.
- ZGNX is trading at a new low 22.15% 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 ZGNX:
Zogenix, Inc., a pharmaceutical company, develops and commercializes therapies for the treatment of central nervous system disorders and pain. The company's commercial product includes Zohydro, a single-entity extended-release hydrocodone for the treatment of moderate to severe chronic pain. Currently there are 5 analysts that rate Zogenix a buy, no analysts rate it a sell, and none rate it a hold.
The average volume for Zogenix has been 2.8 million shares per day over the past 30 days. Zogenix has a market cap of $287.7 million and is part of the health care sector and drugs industry. The stock has a beta of 1.39 and a short float of 26.5% with 7.30 days to cover. Shares are up 37.2% year-to-date as of the close of trading on Monday.
Analysis:
rates Zogenix as a
. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- Net operating cash flow has significantly decreased to -$30.54 million or 217.49% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- ZGNX'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 61.25%, 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 change in net income from the same quarter one year ago has significantly exceeded that of the Pharmaceuticals industry average, but is less than that of the S&P 500. The net income has decreased by 18.2% when compared to the same quarter one year ago, dropping from -$10.85 million to -$12.83 million.
- ZOGENIX INC has improved earnings per share by 10.0% 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, ZOGENIX INC reported poor results of -$0.72 versus -$0.64 in the prior year. This year, the market expects an improvement in earnings (-$0.64 versus -$0.72).
- Compared to other companies in the Pharmaceuticals industry and the overall market, ZOGENIX INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full Zogenix Ratings Report.
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