Trade-Ideas LLC identified

Akorn

(

AKRX

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

  • AKRX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $76.3 million.
  • AKRX has traded 317,268 shares today.
  • AKRX is trading at 5.10 times the normal volume for the stock at this time of day.
  • AKRX is trading at a new low 5.13% 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 AKRX with the Ticky from Trade-Ideas. See the FREE profile for AKRX NOW at Trade-Ideas

More details on AKRX:

Akorn, Inc. develops, manufactures, and markets generic and branded prescription pharmaceuticals, as well as animal and over-the-counter (OTC) consumer health products in the United States and internationally. It operates through two segments, Prescription Pharmaceuticals and Consumer Health. AKRX has a PE ratio of 82. Currently there are 8 analysts that rate Akorn a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Akorn has been 1.7 million shares per day over the past 30 days. Akorn has a market cap of $3.2 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.17 and a short float of 11.3% with 3.20 days to cover. Shares are down 26.4% year-to-date as of the close of trading on Tuesday.

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 Akorn as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and generally higher debt management risk.

Highlights from the ratings report include:

  • AKRX's very impressive revenue growth greatly exceeded the industry average of 3.4%. Since the same quarter one year prior, revenues leaped by 168.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 105.3% when compared to the same quarter one year prior, rising from $16.68 million to $34.23 million.
  • AKORN INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AKORN INC reported lower earnings of $0.29 versus $0.46 in the prior year. This year, the market expects an improvement in earnings ($1.95 versus $0.29).
  • 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. In comparison to the other companies in the Pharmaceuticals industry and the overall market, AKORN INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • AKRX'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 34.31%, 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. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, AKRX is still more expensive than most of the other companies in its industry.

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.