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

Opko Health

(

OPK

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

  • OPK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $86.0 million.
  • OPK has traded 766,031 shares today.
  • OPK is trading at 3.46 times the normal volume for the stock at this time of day.
  • OPK is trading at a new low 6.11% 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 OPK:

Opko Health, Inc., a biopharmaceutical and diagnostics company, is engaged in the discovery, development, and commercialization of novel and proprietary technologies. It operates in two segments, Pharmaceuticals and Diagnostics. Currently there are 4 analysts that rate Opko Health a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Opko Health has been 3.4 million shares per day over the past 30 days. Opko Health has a market cap of $6.2 billion and is part of the health care sector and health services industry. The stock has a beta of 0.68 and a short float of 22% with 7.29 days to cover. Shares are up 40.9% year-to-date as of the close of trading on Thursday.

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 Opko Health as a

hold

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • Powered by its strong earnings growth of 35.29% and other important driving factors, this stock has surged by 77.70% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • OPK's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, OPK has a quick ratio of 1.84, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 46.71% is the gross profit margin for OPKO HEALTH INC which we consider to be strong. Regardless of OPK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OPK's net profit margin of -246.12% significantly underperformed when compared to the industry average.
  • Net operating cash flow has significantly decreased to -$21.08 million or 83.72% 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.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Biotechnology industry and the overall market, OPKO HEALTH INC's return on equity significantly trails that of both the industry average and the S&P 500.

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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