Trade-Ideas LLC identified

Novavax

(

NVAX

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

  • NVAX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $28.6 million.
  • NVAX has traded 485,253 shares today.
  • NVAX is trading at 2.07 times the normal volume for the stock at this time of day.
  • NVAX is trading at a new low 3.11% 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 NVAX:

Novavax, Inc., a clinical-stage vaccine company, focuses on discovering, developing, and commercializing recombinant nanoparticle vaccines and adjuvants. The company produces its vaccines using its proprietary recombinant nanoparticle vaccine technology. Currently there are 6 analysts that rate Novavax a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Novavax has been 5.7 million shares per day over the past 30 days. Novavax has a market cap of $1.5 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.83 and a short float of 26.9% with 12.72 days to cover. Shares are down 31.1% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Novavax as a

sell

. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally high debt management risk.

Highlights from the ratings report include:

  • NOVAVAX INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, NOVAVAX INC reported poor results of -$0.59 versus -$0.36 in the prior year. For the next year, the market is expecting a contraction of 63.5% in earnings (-$0.97 versus -$0.59).
  • 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 217.0% when compared to the same quarter one year ago, falling from -$24.37 million to -$77.25 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, NOVAVAX 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 -$69.83 million or 129.02% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 41.65%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 190.00% compared to the year-earlier 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.

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