Auxilium Pharmaceuticals (AUXL) Is Today's Strong On High 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 Auxilium Pharmaceuticals ( AUXL) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Auxilium Pharmaceuticals as such a stock due to the following factors:

  • AUXL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.2 million.
  • AUXL has traded 255,658 shares today.
  • AUXL is trading at 4.54 times the normal volume for the stock at this time of day.
  • AUXL is trading at a new high 4.12% 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 AUXL:

Auxilium Pharmaceuticals, Inc., a specialty biopharmaceutical company, together with its subsidiaries, develops and markets pharmaceutical products for urology and sexual health worldwide. Currently there are 7 analysts that rate Auxilium Pharmaceuticals a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Auxilium Pharmaceuticals has been 1.2 million shares per day over the past 30 days. Auxilium 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 0.51 and a short float of 22.3% with 11.77 days to cover. Shares are up 1.8% 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 Auxilium Pharmaceuticals as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, generally high debt management risk, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • AUXILIUM PHARMA 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, AUXILIUM PHARMA INC swung to a loss, reporting -$0.37 versus $1.74 in the prior year. For the next year, the market is expecting a contraction of 14.9% in earnings (-$0.43 versus -$0.37).
  • 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 Pharmaceuticals industry. The net income has significantly decreased by 185.6% when compared to the same quarter one year ago, falling from $42.65 million to -$36.50 million.
  • The debt-to-equity ratio is very high at 3.06 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, AUXL has a quick ratio of 0.60, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • 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 Pharmaceuticals industry and the overall market, AUXILIUM PHARMA 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 -$21.69 million or 136.93% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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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