Trade-Ideas LLC identified

Lexicon Pharmaceuticals

(

LXRX

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

  • LXRX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $10.0 million.
  • LXRX has traded 73,366 shares today.
  • LXRX is trading at 2.07 times the normal volume for the stock at this time of day.
  • LXRX is trading at a new low 4.28% 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 LXRX:

TheStreet Recommends

Lexicon Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the discovery and development of pharmaceutical products for the treatment of human diseases. Currently there are 2 analysts that rate Lexicon Pharmaceuticals a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for Lexicon Pharmaceuticals has been 1.7 million shares per day over the past 30 days. Lexicon has a market cap of $1.1 billion and is part of the health care sector and drugs industry. The stock has a beta of -0.66 and a short float of 45% with 11.30 days to cover. Shares are up 57.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Lexicon Pharmaceuticals as a

sell

. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and unimpressive growth in net income.

Highlights from the ratings report include:

  • Net operating cash flow has significantly decreased to -$32.18 million or 63.71% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Biotechnology industry average. The net income has decreased by 7.9% when compared to the same quarter one year ago, dropping from -$26.03 million to -$28.07 million.
  • 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 Biotechnology industry and the overall market, LEXICON PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The revenue fell significantly faster than the industry average of 10.3%. Since the same quarter one year prior, revenues fell by 44.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The current debt-to-equity ratio, 0.46, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 6.49, which clearly demonstrates the ability to cover short-term cash needs.

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