Trade-Ideas LLC identified

Ironwood Pharmaceuticals

(

IRWD

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

  • IRWD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.0 million.
  • IRWD has traded 112,733 shares today.
  • IRWD is trading at 2.56 times the normal volume for the stock at this time of day.
  • IRWD is trading at a new high 4.03% 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 IRWD:

Ironwood Pharmaceuticals, Inc., a pharmaceutical company, engages in the research, development, and commercialization of human therapeutic products. Currently there are 2 analysts that rate Ironwood Pharmaceuticals a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Ironwood Pharmaceuticals has been 1.5 million shares per day over the past 30 days. Ironwood has a market cap of $1.4 billion and is part of the health care sector and drugs industry. Shares are down 10.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Ironwood Pharmaceuticals as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and generally high debt management risk.

Highlights from the ratings report include:

  • IRWD'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 37.31%, 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.
  • The debt-to-equity ratio is very high at 4.01 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 6.46, which shows the ability to cover short-term cash needs.
  • 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, IRONWOOD PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to -$19.36 million or 15.03% when compared to the same quarter last year. Despite an increase in cash flow, IRONWOOD PHARMACEUTICALS INC's cash flow growth rate is still lower than the industry average growth rate of 26.56%.
  • IRONWOOD PHARMACEUTICALS 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, IRONWOOD PHARMACEUTICALS INC continued to lose money by earning -$1.00 versus -$1.39 in the prior year. This year, the market expects an improvement in earnings (-$0.55 versus -$1.00).

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