Strong On High Volume: Arrowhead Research (ARWR)

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

  • ARWR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $77.5 million.
  • ARWR has traded 709,190 shares today.
  • ARWR is trading at 2.08 times the normal volume for the stock at this time of day.
  • ARWR is trading at a new high 3.20% 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 ARWR:

Arrowhead Research Corporation, a biopharmaceutical company, develops targeted RNAi therapeutics in the United States. Currently there are 5 analysts that rate Arrowhead Research a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Arrowhead Research has been 3.0 million shares per day over the past 30 days. Arrowhead Research has a market cap of $811.6 million and is part of the health care sector and drugs industry. The stock has a beta of 3.31 and a short float of 10% with 2.49 days to cover. Shares are up 50% year-to-date as of the close of trading on Wednesday.

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

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Arrowhead Research as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and weak operating cash flow.

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 significantly decreased by 91.3% when compared to the same quarter one year ago, falling from -$6.08 million to -$11.63 million.
  • Net operating cash flow has significantly decreased to -$9.78 million or 83.27% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Biotechnology industry and the overall market, ARROWHEAD RESEARCH CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The revenue fell significantly faster than the industry average of 43.4%. Since the same quarter one year prior, revenues slightly dropped by 2.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • ARROWHEAD RESEARCH CORP's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, ARROWHEAD RESEARCH CORP continued to lose money by earning -$1.32 versus -$1.89 in the prior year. This year, the market expects an improvement in earnings (-$1.04 versus -$1.32).

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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