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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

Cytokinetics

(

CYTK

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

  • CYTK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.1 million.
  • CYTK has traded 356,855 shares today.
  • CYTK is trading at 9.28 times the normal volume for the stock at this time of day.
  • CYTK is trading at a new low 5.12% 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 CYTK:

TheStreet Recommends

Cytokinetics, Incorporated, a clinical stage biopharmaceutical company, focuses on the discovery and development of novel small molecule therapeutics that modulate muscle function for the potential treatment of serious diseases and medical conditions. Currently there are 2 analysts that rate Cytokinetics a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Cytokinetics has been 349,000 shares per day over the past 30 days. Cytokinetics has a market cap of $244.2 million and is part of the health care sector and drugs industry. The stock has a beta of 1.86 and a short float of 3.9% with 1.41 days to cover. Shares are up 6.2% 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 Cytokinetics 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 significantly decreased to -$9.52 million or 192.29% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • CYTK has underperformed the S&P 500 Index, declining 13.55% 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'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, CYTOKINETICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • CYTK 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 6.14, which clearly demonstrates the ability to cover short-term cash needs.
  • CYTOKINETICS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, CYTOKINETICS INC continued to lose money by earning -$1.34 versus -$2.46 in the prior year. This year, the market expects an improvement in earnings (-$0.90 versus -$1.34).

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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