Trade-Ideas LLC identified

Pernix Therapeutics Holdings

(

PTX

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

  • PTX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.6 million.
  • PTX has traded 2.5 million shares today.
  • PTX is trading at 4.01 times the normal volume for the stock at this time of day.
  • PTX is trading at a new low 11.23% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in PTX with the Ticky from Trade-Ideas. See the FREE profile for PTX NOW at Trade-Ideas

More details on PTX:

Pernix Therapeutics Holdings, Inc., a specialty pharmaceutical company, develops, manufactures, markets, and sells pharmaceutical products. Currently there is 1 analyst that rates Pernix Therapeutics Holdings a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Pernix Therapeutics Holdings has been 3.5 million shares per day over the past 30 days. Pernix has a market cap of $30.0 million and is part of the health care sector and drugs industry. The stock has a beta of 1.68 and a short float of 8.1% with 0.87 days to cover. Shares are down 82.7% year-to-date as of the close of trading on Wednesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Pernix Therapeutics Holdings as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • The debt-to-equity ratio is very high at 35.31 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, PTX maintains a poor quick ratio of 0.87, which illustrates the inability to avoid short-term cash problems.
  • 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 Pharmaceuticals industry and the overall market, PERNIX THERAPEUTICS HOLDINGS's return on equity significantly trails that of both the industry average and the S&P 500.
  • PTX'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 93.36%, 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 change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Pharmaceuticals industry average. The net income has decreased by 9.6% when compared to the same quarter one year ago, dropping from -$23.67 million to -$25.94 million.
  • PTX, with its decline in revenue, slightly underperformed the industry average of 0.9%. Since the same quarter one year prior, revenues slightly dropped by 4.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.