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

Sorrento Therapeutics

(

SRNE

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

  • SRNE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.7 million.
  • SRNE has traded 76,821 shares today.
  • SRNE is trading at 13.91 times the normal volume for the stock at this time of day.
  • SRNE is trading at a new high 6.00% 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 SRNE:

Sorrento Therapeutics, Inc., a clinical stage biopharmaceutical company, focuses on the discovery, development, and commercialization of proprietary drug therapeutics for addressing unmet medical needs in the United States, Europe, and internationally. Currently there are 2 analysts that rate Sorrento Therapeutics a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Sorrento Therapeutics has been 226,200 shares per day over the past 30 days. Sorrento has a market cap of $274.9 million and is part of the health care sector and drugs industry. The stock has a beta of 4.51 and a short float of 0.6% with 0.11 days to cover. Shares are up 17.3% year-to-date as of the close of trading on Wednesday.

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 Sorrento 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 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 126.6% when compared to the same quarter one year ago, falling from -$3.36 million to -$7.61 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, SORRENTO THERAPEUTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$5.60 million or 87.72% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • SORRENTO THERAPEUTICS INC's earnings per share declined by 12.5% 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, SORRENTO THERAPEUTICS INC reported poor results of -$1.30 versus $0.00 in the prior year. This year, the market expects an improvement in earnings (-$1.28 versus -$1.30).
  • Compared to where it was a year ago, the stock is now trading at a higher level, and has traded in line with the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.

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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