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

Medicines Company

(

MDCO

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

  • MDCO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $32.3 million.
  • MDCO has traded 521,238 shares today.
  • MDCO is trading at 7.12 times the normal volume for the stock at this time of day.
  • MDCO is trading at a new low 5.02% 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 MDCO:

The Medicines Company provides medicines for patients in acute and intensive care hospitals worldwide. Currently there are 3 analysts that rate Medicines Company a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Medicines Company has been 1.1 million shares per day over the past 30 days. Medicines 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 1.59 and a short float of 21.8% with 10.61 days to cover. Shares are up 21% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Medicines Company as a

hold

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • Powered by its strong earnings growth of 200.00% and other important driving factors, this stock has surged by 36.71% over the past year, outperforming the rise in the S&P 500 Index during the same period. Although MDCO had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Pharmaceuticals industry. The net income increased by 200.8% when compared to the same quarter one year prior, rising from -$5.00 million to $5.03 million.
  • The gross profit margin for MEDICINES CO is currently very high, coming in at 79.31%. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, MDCO's net profit margin of 3.97% significantly trails the industry average.
  • Net operating cash flow has significantly decreased to -$41.03 million or 706.22% 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 company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Pharmaceuticals industry and the overall market, MEDICINES CO's return on equity significantly trails that of both the industry average and the S&P 500.

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