Trade-Ideas LLC identified

PTC Therapeutics

(

PTCT

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

  • PTCT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $10.6 million.
  • PTCT has traded 615,924 shares today.
  • PTCT is trading at 4.39 times the normal volume for the stock at this time of day.
  • PTCT is trading at a new low 4.05% 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 PTCT:

PTC Therapeutics, Inc., a biopharmaceutical company, focuses on the discovery, development, and commercialization of orally administered, small molecule drugs that target post-transcriptional control processes. Currently there are 3 analysts that rate PTC Therapeutics a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for PTC Therapeutics has been 2.3 million shares per day over the past 30 days. PTC has a market cap of $264.2 million and is part of the health care sector and drugs industry. The stock has a beta of -0.45 and a short float of 23.4% with 5.90 days to cover. Shares are down 74.9% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates PTC Therapeutics as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, 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:

  • The company, on the basis of change in net income 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 has decreased by 8.8% when compared to the same quarter one year ago, dropping from -$37.92 million to -$41.23 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Biotechnology industry and the overall market, PTC THERAPEUTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to -$41.59 million or 14.17% 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.
  • Looking at the price performance of PTCT's shares over the past 12 months, there is not much good news to report: the stock is down 86.99%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier 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.
  • PTC THERAPEUTICS INC's earnings per share declined by 6.1% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, PTC THERAPEUTICS INC reported poor results of -$5.06 versus -$3.21 in the prior year. This year, the market expects an improvement in earnings (-$4.80 versus -$5.06).

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