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

Sunesis Pharmaceuticals

(

SNSS

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

  • SNSS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.9 million.
  • SNSS has traded 291,591 shares today.
  • SNSS is trading at 4.30 times the normal volume for the stock at this time of day.
  • SNSS is trading at a new low 3.03% 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 SNSS:

Sunesis Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the development and commercialization of oncology therapeutics for the treatment of solid and hematologic cancers. Currently there are 3 analysts that rate Sunesis Pharmaceuticals a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for Sunesis Pharmaceuticals has been 979,400 shares per day over the past 30 days. Sunesis has a market cap of $163.9 million and is part of the health care sector and drugs industry. The stock has a beta of 2.46 and a short float of 12.2% with 3.99 days to cover. Shares are up 3.5% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Sunesis Pharmaceuticals as a

sell

. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • SNSS's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 67.33%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
  • The company, on the basis of net income growth 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 increased by 81.6% when compared to the same quarter one year prior, rising from -$7.18 million to -$1.32 million.
  • SNSS, with its very weak revenue results, has greatly underperformed against the industry average of 36.4%. Since the same quarter one year prior, revenues plummeted by 55.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • SUNESIS PHARMACEUTICALS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. However, the consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal year, SUNESIS PHARMACEUTICALS INC reported poor results of -$0.73 versus -$0.72 in the prior year. This year, the market expects an improvement in earnings (-$0.56 versus -$0.73).
  • SNSS's debt-to-equity ratio of 0.67 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. Despite the fact that SNSS's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.54 is high and demonstrates strong liquidity.

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