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 or Stephanie Link.

Trade-Ideas LLC identified

Vanda Pharmaceuticals

(

VNDA

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

  • VNDA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $17.0 million.
  • VNDA has traded 181,457 shares today.
  • VNDA is trading at 4.13 times the normal volume for the stock at this time of day.
  • VNDA is trading at a new high 5.08% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 VNDA with the Ticky from Trade-Ideas. See the FREE profile for VNDA NOW at Trade-Ideas

More details on VNDA:

Vanda Pharmaceuticals Inc., a biopharmaceutical company, is engaged in the development and commercialization of pharmaceutical products. Currently there is 1 analyst that rates Vanda Pharmaceuticals a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Vanda Pharmaceuticals has been 654,700 shares per day over the past 30 days. Vanda has a market cap of $415.3 million and is part of the health care sector and drugs industry. The stock has a beta of 2.08 and a short float of 34.7% with 7.53 days to cover. Shares are down 4% year-to-date as of the close of trading on Monday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Vanda 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 increase in net income. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:

  • VNDA's very impressive revenue growth greatly exceeded the industry average of 38.9%. Since the same quarter one year prior, revenues leaped by 69.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • VNDA has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, VNDA has a quick ratio of 1.54, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has increased to -$7.60 million or 26.01% when compared to the same quarter last year. Despite an increase in cash flow of 26.01%, VANDA PHARMACEUTICALS INC is still growing at a significantly lower rate than the industry average of 110.65%.
  • VANDA PHARMACEUTICALS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, VANDA PHARMACEUTICALS INC continued to lose money by earning -$0.68 versus -$0.98 in the prior year. For the next year, the market is expecting a contraction of 152.9% in earnings (-$1.72 versus -$0.68).
  • 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, VANDA PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

null