Trade-Ideas: Immunogen (IMGN) Is Today's Strong On High Relative Volume Stock

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

  • IMGN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.5 million.
  • IMGN has traded 79,915 shares today.
  • IMGN is trading at 2.01 times the normal volume for the stock at this time of day.
  • IMGN is trading at a new high 3.01% 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 IMGN:

ImmunoGen, Inc., a biotechnology company, develops targeted anticancer therapeutics. The company develops its products using its targeted antibody payload technology. It offers Kadcyla, an antibody-drug conjugate for the treatment of HER2-positive metastatic breast cancer. Currently there are 5 analysts that rate Immunogen a buy, 2 analysts rate it a sell, and 4 rate it a hold.

The average volume for Immunogen has been 826,600 shares per day over the past 30 days. Immunogen has a market cap of $1.0 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.75 and a short float of 15.9% with 15.31 days to cover. Shares are down 19% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Immunogen as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in 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 significantly underperformed when compared to that of the S&P 500 and the Biotechnology industry. The net income has decreased by 21.1% when compared to the same quarter one year ago, dropping from -$21.88 million to -$26.50 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, IMMUNOGEN 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 -$18.97 million or 63.37% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Looking at the price performance of IMGN's shares over the past 12 months, there is not much good news to report: the stock is down 29.82%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier 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.
  • IMMUNOGEN INC's earnings per share declined by 19.2% in the most recent quarter compared to the same quarter a year ago. 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, IMMUNOGEN INC continued to lose money by earning -$0.84 versus -$0.87 in the prior year. This year, the market expects an improvement in earnings (-$0.71 versus -$0.84).

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