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

Horizon Pharma

(

HZNP

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

  • HZNP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $44.6 million.
  • HZNP has traded 2.0 million shares today.
  • HZNP is trading at 23.06 times the normal volume for the stock at this time of day.
  • HZNP is trading at a new high 12.01% 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 HZNP:

Horizon Pharma plc, a specialty pharmaceutical company, through its subsidiaries, develops and commercializes medicines for the treatment of arthritis, pain, and inflammatory diseases. Currently there are 5 analysts that rate Horizon Pharma a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Horizon Pharma has been 1.9 million shares per day over the past 30 days. Horizon has a market cap of $2.2 billion and is part of the health care sector and drugs industry. The stock has a beta of 2.08 and a short float of 18.8% with 6.04 days to cover. Shares are up 47.9% 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 Horizon Pharma as a

sell

. The area that we feel has been the company's primary weakness has been its generally higher debt management risk.

Highlights from the ratings report include:

  • 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, HORIZON PHARMA PLC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for HORIZON PHARMA PLC is currently very high, coming in at 90.92%. Regardless of HZNP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HZNP's net profit margin of 2.74% is significantly lower than the industry average.
  • HZNP's debt-to-equity ratio of 0.85 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.19 is sturdy.
  • Net operating cash flow has significantly increased by 115.52% to $1.47 million when compared to the same quarter last year. In addition, HORIZON PHARMA PLC has also vastly surpassed the industry average cash flow growth rate of -47.98%.
  • This stock has increased by 56.19% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in HZNP do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

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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