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

AVEO Pharmaceuticals

(

AVEO

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

  • AVEO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.4 million.
  • AVEO has traded 170,690 shares today.
  • AVEO is trading at 2.26 times the normal volume for the stock at this time of day.
  • AVEO is trading at a new high 5.44% 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 AVEO:

AVEO Pharmaceuticals, Inc., doing business as AVEO Oncology, a biopharmaceutical company, is engaged in discovering, developing, and commercializing targeted cancer therapies using its Human Response Platform. Currently there are no analysts that rate AVEO Pharmaceuticals a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for AVEO Pharmaceuticals has been 1.0 million shares per day over the past 30 days. AVEO has a market cap of $81.3 million and is part of the health care sector and drugs industry. The stock has a beta of 1.27 and a short float of 0.5% with 0.05 days to cover. Shares are up 85.7% 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 AVEO Pharmaceuticals as a

sell

. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Biotechnology industry and the overall market, AVEO PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • AVEO has underperformed the S&P 500 Index, declining 24.47% from its price level of one year ago. 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 40.6% when compared to the same quarter one year prior, rising from -$24.31 million to -$14.44 million.
  • Despite currently having a low debt-to-equity ratio of 0.60, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that AVEO's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.76 is high and demonstrates strong liquidity.
  • Net operating cash flow has significantly increased by 64.06% to -$8.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 50.58%.

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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