Bluebird Bio (BLUE) Stock: Weak On High Volume Today

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

  • BLUE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $11.7 million.
  • BLUE has traded 65,806 shares today.
  • BLUE is trading at 3.78 times the normal volume for the stock at this time of day.
  • BLUE is trading at a new low 4.55% 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 BLUE:

bluebird bio, Inc., a clinical-stage biotechnology company, focuses on developing gene therapies for severe genetic and orphan diseases. BLUE has a PE ratio of 6.2. Currently there are 3 analysts that rate bluebird bio a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for bluebird bio has been 519,100 shares per day over the past 30 days. Bluebird bio has a market cap of $1.1 billion and is part of the health care sector and drugs industry. Shares are up 90.7% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates bluebird bio as a sell. The area that we feel has been the company's primary weakness has been its feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Biotechnology industry average, but is greater than that of the S&P 500. The net income increased by 66.7% when compared to the same quarter one year prior, rising from -$4.58 million to -$1.53 million.
  • BLUEBIRD BIO INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. For the next year, the market is expecting a contraction of 114.4% in earnings (-$1.72 versus -$0.80).
  • Compared to other companies in the Biotechnology industry and the overall market, BLUEBIRD BIO INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has fallen to -$11.32 million from having none in the same quarter last year. Since the company had no net operating cash flow for the prior period, we cannot calculate a percent change in order to compare its growth rate with that of its industry average.
  • This stock has increased by 51.37% over the past year, outperforming the rise in the S&P 500 Index during the same period. Despite the fact that the stock's value has already enjoyed nice gains in the past year, we feel that the risks surrounding an investment in this stock outweigh any potential future returns.

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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