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 $10.4 million.
  • VNDA has traded 92,506 shares today.
  • VNDA is trading at 5.46 times the normal volume for the stock at this time of day.
  • VNDA is trading at a new high 7.25% 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:

TheStreet Recommends

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 525,800 shares per day over the past 30 days. Vanda has a market cap of $376.4 million and is part of the health care sector and drugs industry. The stock has a beta of 1.96 and a short float of 33.1% with 9.71 days to cover. Shares are down 10.5% 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

sell

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

Highlights from the ratings report include:

  • 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 537.7% when compared to the same quarter one year ago, falling from -$3.38 million to -$21.58 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, VANDA PHARMACEUTICALS 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 -$36.67 million or 355.86% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • VANDA PHARMACEUTICALS 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings 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 194.1% in earnings (-$2.00 versus -$0.68).
  • Looking at where the stock is today compared to one year ago, we find that it is higher, and it has outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.

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

null