Trade-Ideas LLC identified

Vertex Pharmaceuticals

(

VRTX

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

  • VRTX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $212.2 million.
  • VRTX has traded 145,013 shares today.
  • VRTX is trading at 2.17 times the normal volume for the stock at this time of day.
  • VRTX is trading at a new high 4.09% 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.

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More details on VRTX:

TheStreet Recommends

Vertex Pharmaceuticals Incorporated engages in discovering, developing, manufacturing, and commercializing small molecule drugs for patients with serious diseases in specialty markets. Currently there are 8 analysts that rate Vertex Pharmaceuticals a buy, no analysts rate it a sell, and 10 rate it a hold.

The average volume for Vertex Pharmaceuticals has been 1.6 million shares per day over the past 30 days. Vertex has a market cap of $29.2 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.22 and a short float of 1.4% with 1.98 days to cover. Shares are up 2% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Vertex Pharmaceuticals as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity 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 underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Biotechnology industry average. The net income has decreased by 18.5% when compared to the same quarter one year ago, dropping from -$159.38 million to -$188.85 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, VERTEX PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • VERTEX PHARMACEUTICALS INC's earnings per share declined by 14.7% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, VERTEX PHARMACEUTICALS INC reported poor results of -$3.14 versus -$2.29 in the prior year. This year, the market expects an improvement in earnings (-$1.29 versus -$3.14).
  • VRTX's debt-to-equity ratio of 0.92 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.21 is very high and demonstrates very strong liquidity.
  • Net operating cash flow has increased to -$95.21 million or 25.56% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 14.28%.

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