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

Athersys

(

ATHX

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

  • ATHX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.7 million.
  • ATHX has traded 1.3 million shares today.
  • ATHX is trading at 2.16 times the normal volume for the stock at this time of day.
  • ATHX is trading at a new low 6.01% 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 ATHX:

Athersys, Inc., a biotechnology company, focuses on the research and development activities in the field of regenerative medicine. Currently there are 3 analysts that rate Athersys a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Athersys has been 1.4 million shares per day over the past 30 days. Athersys has a market cap of $244.7 million and is part of the health care sector and drugs industry. The stock has a beta of -0.02 and a short float of 5.7% with 2.67 days to cover. Shares are up 88.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Athersys as a

sell

. 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 declined marginally to -$6.25 million or 9.22% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • In its most recent trading session, ATHX has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • 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 15.9% when compared to the same quarter one year prior, going from -$5.61 million to -$4.72 million.
  • 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 Biotechnology industry and the overall market, ATHERSYS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • ATHX, with its very weak revenue results, has greatly underperformed against the industry average of 35.4%. Since the same quarter one year prior, revenues plummeted by 52.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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