Trade-Ideas LLC identified

Cara Therapeutics

(

CARA

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

  • CARA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.6 million.
  • CARA has traded 280,136 shares today.
  • CARA is trading at 10.03 times the normal volume for the stock at this time of day.
  • CARA is trading at a new high 9.03% 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 CARA:

Cara Therapeutics, Inc., a clinical-stage biopharmaceutical company, focuses on developing and commercializing chemical entities designed to alleviate pain by selectively targeting kappa opioid receptors. Currently there are 4 analysts that rate Cara Therapeutics a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Cara Therapeutics has been 386,200 shares per day over the past 30 days. Cara has a market cap of $188.2 million and is part of the health care sector and drugs industry. Shares are down 71.8% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Cara Therapeutics as a

sell

. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:

  • Net operating cash flow has significantly decreased to -$7.82 million or 74.13% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • CARA'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 32.59%, 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.
  • CARA THERAPEUTICS INC has improved earnings per share by 34.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, CARA THERAPEUTICS INC reported poor results of -$0.78 versus -$0.10 in the prior year. For the next year, the market is expecting a contraction of 25.6% in earnings (-$0.98 versus -$0.78).
  • 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, CARA THERAPEUTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • CARA has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 33.70, which clearly demonstrates the ability to cover short-term cash needs.

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