Trade-Ideas LLC identified

La Jolla Pharmaceutical

(

LJPC

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

  • LJPC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.2 million.
  • LJPC has traded 55,092 shares today.
  • LJPC is trading at 2.20 times the normal volume for the stock at this time of day.
  • LJPC is trading at a new low 3.06% 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 LJPC:

La Jolla Pharmaceutical Company, a biopharmaceutical company, focuses on the discovery, development, and commercialization of therapeutics for life-threatening diseases. Currently there are 4 analysts that rate La Jolla Pharmaceutical a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for La Jolla Pharmaceutical has been 309,800 shares per day over the past 30 days. La Jolla has a market cap of $531.2 million and is part of the health care sector and drugs industry. The stock has a beta of 0.03 and a short float of 13% with 6.54 days to cover. Shares are up 57.8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates La Jolla Pharmaceutical as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, weak operating cash flow and feeble growth in its earnings per share.

Highlights from the ratings report include:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Biotechnology industry. The net income has significantly decreased by 107.3% when compared to the same quarter one year ago, falling from -$5.05 million to -$10.47 million.
  • Net operating cash flow has significantly decreased to -$5.46 million or 95.69% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • LA JOLLA PHARMACEUTICAL CO has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, LA JOLLA PHARMACEUTICAL CO continued to lose money by earning -$2.35 versus -$97.50 in the prior year. For the next year, the market is expecting a contraction of 14.5% in earnings (-$2.69 versus -$2.35).
  • 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, LA JOLLA PHARMACEUTICAL CO's return on equity significantly trails that of both the industry average and the S&P 500.
  • Compared to its closing price of one year ago, LJPC's share price has jumped by 117.19%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in LJPC do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

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