Strong On High Relative Volume: United Therapeutics (UTHR)

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

  • UTHR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $158.5 million.
  • UTHR has traded 124,393 shares today.
  • UTHR is trading at 5.31 times the normal volume for the stock at this time of day.
  • UTHR is trading at a new high 3.05% 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 UTHR:

United Therapeutics Corporation, a biotechnology company, develops and commercializes products to address the unmet medical needs of patients with chronic and life-threatening conditions worldwide. UTHR has a PE ratio of 22.0. Currently there are 4 analysts that rate United Therapeutics a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for United Therapeutics has been 786,500 shares per day over the past 30 days. United has a market cap of $5.3 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.57 and a short float of 16.5% with 3.64 days to cover. Shares are up 1.6% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates United Therapeutics as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, robust revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and growth in earnings per share. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • Powered by its strong earnings growth of 38.15% and other important driving factors, this stock has surged by 52.89% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, UTHR should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • UTHR's revenue growth trails the industry average of 43.5%. Since the same quarter one year prior, revenues rose by 15.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • UTHR's debt-to-equity ratio is very low at 0.30 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.18, which illustrates the ability to avoid short-term cash problems.
  • UNITED THERAPEUTICS CORP has improved earnings per share by 38.1% 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, UNITED THERAPEUTICS CORP reported lower earnings of $3.28 versus $5.69 in the prior year. This year, the market expects an improvement in earnings ($8.38 versus $3.28).

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