Trade-Ideas LLC identified

BioDelivery Sciences International

(

BDSI

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

  • BDSI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.5 million.
  • BDSI has traded 535,157 shares today.
  • BDSI is trading at 6.25 times the normal volume for the stock at this time of day.
  • BDSI is trading at a new low 10.29% 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 BDSI:

BioDelivery Sciences International, Inc., a specialty pharmaceutical company, engages in the development and commercialization of pharmaceutical products principally in the areas of pain management and addiction. Currently there are 6 analysts that rate BioDelivery Sciences International a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for BioDelivery Sciences International has been 1.1 million shares per day over the past 30 days. BioDelivery Sciences International has a market cap of $194.9 million and is part of the health care sector and drugs industry. The stock has a beta of 1.34 and a short float of 23.6% with 9.69 days to cover. Shares are down 29% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates BioDelivery Sciences International as a

sell

. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins, weak operating cash flow, generally disappointing historical performance in the stock itself and generally high debt management risk.

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 Pharmaceuticals industry and the overall market, BIODELIVERY SCIENCES INTL's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for BIODELIVERY SCIENCES INTL is currently extremely low, coming in at 5.51%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -1655.06% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$13.37 million or 548.25% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • BDSI'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 73.66%, 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.
  • Currently the debt-to-equity ratio of 1.51 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Regardless of the company's weak debt-to-equity ratio, BDSI has managed to keep a strong quick ratio of 2.13, which demonstrates the ability to cover short-term cash needs.

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