Receptos (RCPT) Flagged As Strong On High Volume

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

  • RCPT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $18.5 million.
  • RCPT has traded 55,852 shares today.
  • RCPT is trading at 7.52 times the normal volume for the stock at this time of day.
  • RCPT is trading at a new high 8.22% 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 RCPT:

Receptos, Inc., a clinical-stage biopharmaceutical company, focuses on the discovery, development, and commercialization of various therapeutics for immune disorders. Currently there is 1 analyst that rates Receptos a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Receptos has been 488,800 shares per day over the past 30 days. Receptos has a market cap of $1.3 billion and is part of the health care sector and drugs industry. Shares are up 61.5% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Receptos as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share and deteriorating net income.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, RCPT's share price has jumped by 189.95%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • RCPT's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • Compared to other companies in the Biotechnology industry and the overall market, RECEPTOS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • RECEPTOS 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. For the next year, the market is expecting a contraction of 50.2% in earnings (-$4.10 versus -$2.73).
  • 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 133.4% when compared to the same quarter one year ago, falling from -$9.92 million to -$23.15 million.

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

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