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.

Trade-Ideas LLC identified

Omeros

(

OMER

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

  • OMER has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.9 million.
  • OMER has traded 70,872 shares today.
  • OMER is trading at 2.69 times the normal volume for the stock at this time of day.
  • OMER is trading at a new low 4.16% 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 OMER:

Omeros Corporation, a biopharmaceutical company, discovers, develops, and commercializes small-molecule and protein therapeutics, and orphan indications targeting inflammation, coagulopathies, and disorders of the central nervous system. Currently there are 6 analysts that rate Omeros a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Omeros has been 487,600 shares per day over the past 30 days. Omeros has a market cap of $575.1 million and is part of the health care sector and drugs industry. The stock has a beta of 2.60 and a short float of 28.8% with 23.10 days to cover. Shares are down 41.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Omeros as a

sell

. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally high debt management risk.

Highlights from the ratings report include:

  • Net operating cash flow has significantly decreased to -$17.48 million or 56.89% 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.
  • Currently the debt-to-equity ratio of 1.51 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 3.52, 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 Pharmaceuticals industry and the overall market, OMEROS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and the Pharmaceuticals industry average. The net income has decreased by 12.2% when compared to the same quarter one year ago, dropping from -$16.64 million to -$18.67 million.
  • OMEROS CORP has improved earnings per share by 5.5% 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, OMEROS CORP reported poor results of -$2.22 versus -$1.39 in the prior year. This year, the market expects an improvement in earnings (-$1.50 versus -$2.22).

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