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

Endocyte

(

ECYT

) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Endocyte as such a stock due to the following factors:

  • ECYT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.2 million.
  • ECYT traded 185,039 shares today in the pre-market hours as of 8:26 AM, representing 14.4% of its average daily volume.

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More details on ECYT:

Endocyte, Inc., a biopharmaceutical company, develops targeted therapies for the treatment of cancer and inflammatory diseases in the United States. The company uses its proprietary technology to create novel small molecule drug conjugates (SMDCs) and companion imaging agents. Currently there are 4 analysts that rate Endocyte a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Endocyte has been 1.9 million shares per day over the past 30 days. Endocyte has a market cap of $290.2 million and is part of the health care sector and drugs industry. The stock has a beta of 0.89 and a short float of 19.6% with 4.85 days to cover. Shares are down 34.4% year-to-date as of the close of trading on Monday.

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 Endocyte as a

sell

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

Highlights from the ratings report include:

  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Pharmaceuticals industry and the overall market, ENDOCYTE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has declined marginally to -$16.59 million or 9.09% 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.
  • ECYT'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 46.95%, 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.
  • ENDOCYTE INC has improved earnings per share by 18.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ENDOCYTE INC reported poor results of -$0.50 versus -$0.47 in the prior year. This year, the market expects an improvement in earnings (-$0.21 versus -$0.50).
  • The net income growth from the same quarter one year ago has exceeded that of the Pharmaceuticals industry average, but is less than that of the S&P 500. The net income increased by 18.7% when compared to the same quarter one year prior, going from -$3.86 million to -$3.14 million.

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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