Trade-Ideas LLC identified

Pacira Pharmaceuticals

(

PCRX

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

  • PCRX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $58.2 million.
  • PCRX has traded 355,135 shares today.
  • PCRX is trading at 2.51 times the normal volume for the stock at this time of day.
  • PCRX is trading at a new low 9.00% 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 PCRX:

Pacira Pharmaceuticals, Inc., a specialty pharmaceutical company, develops, commercializes, and manufactures proprietary pharmaceutical products primarily for use in hospitals and ambulatory surgery centers in the United States. PCRX has a PE ratio of 233. Currently there are 6 analysts that rate Pacira Pharmaceuticals a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Pacira Pharmaceuticals has been 821,100 shares per day over the past 30 days. Pacira has a market cap of $2.4 billion and is part of the health care sector and drugs industry. The stock has a beta of 2.00 and a short float of 23% with 7.00 days to cover. Shares are down 15.4% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Pacira Pharmaceuticals as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 3.4%. Since the same quarter one year prior, revenues rose by 19.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.50, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.19, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for PACIRA PHARMACEUTICALS INC is currently very high, coming in at 80.12%. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, PCRX's net profit margin of 4.96% significantly trails the industry average.
  • Net operating cash flow has significantly decreased to $2.82 million or 68.61% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • PCRX'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 35.18%, 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. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.

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