Weak On High Volume: Regulus Therapeutics (RGLS) - TheStreet

Trade-Ideas LLC identified

Regulus Therapeutics

(

RGLS

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

  • RGLS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.8 million.
  • RGLS has traded 112,519 shares today.
  • RGLS is trading at 2.28 times the normal volume for the stock at this time of day.
  • RGLS is trading at a new low 4.06% 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 RGLS:

Regulus Therapeutics Inc., a biopharmaceutical company, focuses on the discovery and development of drugs that target microRNAs for the treatment of various diseases in the United States. Currently there are 4 analysts that rate Regulus Therapeutics a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Regulus Therapeutics has been 615,400 shares per day over the past 30 days. Regulus has a market cap of $509.3 million and is part of the health care sector and drugs industry. The stock has a beta of 1.35 and a short float of 27.5% with 18.70 days to cover. Shares are down 39.3% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Regulus Therapeutics 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 generally disappointing historical performance in the stock itself.

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 significantly decreased by 32.7% when compared to the same quarter one year ago, falling from -$9.80 million to -$13.00 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Biotechnology industry and the overall market, REGULUS THERAPEUTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to -$11.80 million or 34.06% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • RGLS'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 44.21%, 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. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • REGULUS THERAPEUTICS INC's earnings per share improvement from the most recent quarter was slightly positive. 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, REGULUS THERAPEUTICS INC reported poor results of -$1.32 versus -$0.58 in the prior year. This year, the market expects an improvement in earnings (-$1.20 versus -$1.32).

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