Trade-Ideas LLC identified

Lannett

(

LCI

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

  • LCI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $21.3 million.
  • LCI has traded 667,366 shares today.
  • LCI is trading at 17.12 times the normal volume for the stock at this time of day.
  • LCI is trading at a new low 15.10% 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 LCI:

TheStreet Recommends

Lannett Company, Inc. develops, manufactures, packages, markets, and distributes generic versions of branded pharmaceutical products in the United States. LCI has a PE ratio of 9. Currently there are 3 analysts that rate Lannett a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Lannett has been 941,200 shares per day over the past 30 days. Lannett has a market cap of $1.3 billion and is part of the health care sector and drugs industry. The stock has a beta of 2.86 and a short float of 34.1% with 12.90 days to cover. Shares are down 13% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Lannett as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, attractive valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 3.4%. Since the same quarter one year prior, revenues rose by 14.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • LCI's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 8.19, which clearly demonstrates the ability to cover short-term cash needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Pharmaceuticals industry and the overall market, LANNETT CO INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • Net operating cash flow has increased to $15.85 million or 10.13% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -0.47%.

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