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

Ampio Pharmaceuticals

(

AMPE

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

  • AMPE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $10.1 million.
  • AMPE has traded 310,225 shares today.
  • AMPE is trading at 2.92 times the normal volume for the stock at this time of day.
  • AMPE is trading at a new low 4.22% 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 AMPE:

Ampio Pharmaceuticals, Inc., a development stage biopharmaceutical company, develops therapies for the treatment of prevalent inflammatory conditions in the United States. Currently there is 1 analyst that rates Ampio Pharmaceuticals a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Ampio Pharmaceuticals has been 890,300 shares per day over the past 30 days. Ampio has a market cap of $243.7 million and is part of the health care sector and drugs industry. The stock has a beta of 0.53 and a short float of 14.7% with 3.12 days to cover. Shares are down 36.9% year-to-date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Ampio Pharmaceuticals as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, 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 against the S&P 500 and did not exceed that of the Pharmaceuticals industry. The net income has significantly decreased by 35.5% when compared to the same quarter one year ago, falling from -$6.42 million to -$8.69 million.
  • Net operating cash flow has significantly decreased to -$9.73 million or 89.74% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • AMPIO PHARMACEUTICALS INC reported flat earnings per share in the most recent 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, AMPIO PHARMACEUTICALS INC reported poor results of -$0.62 versus -$0.34 in the prior year. For the next year, the market is expecting a contraction of 33.9% in earnings (-$0.83 versus -$0.62).
  • AMPE'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 35.43%, which is also worse than the performance of the S&P 500 Index. 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 company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Pharmaceuticals industry and the overall market, AMPIO PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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