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

Exelixis

(

EXEL

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

  • EXEL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.3 million.
  • EXEL has traded 386,796 shares today.
  • EXEL is trading at 3.13 times the normal volume for the stock at this time of day.
  • EXEL is trading at a new high 6.13% 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 EXEL:

Exelixis, Inc., a biotechnology company, develops small molecule therapies for the treatment of cancer in the United States. Currently there is 1 analyst that rates Exelixis a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Exelixis has been 2.4 million shares per day over the past 30 days. Exelixis has a market cap of $308.4 million and is part of the health care sector and drugs industry. The stock has a beta of 1.41 and a short float of 50.6% with 19.65 days to cover. Shares are up 13.2% year-to-date as of the close of trading on Wednesday.

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 Exelixis 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 declined marginally to -$58.01 million or 1.77% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • EXEL'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 78.43%, 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.
  • EXELIXIS INC has improved earnings per share by 11.1% 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, EXELIXIS INC reported poor results of -$1.32 versus -$0.91 in the prior year. For the next year, the market is expecting a contraction of 6.8% in earnings (-$1.41 versus -$1.32).
  • 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 6.8% when compared to the same quarter one year prior, going from -$67.12 million to -$62.56 million.
  • EXEL's revenue growth trails the industry average of 39.0%. Since the same quarter one year prior, revenues rose by 15.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

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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