Senomyx (SNMX) Highlighted As Weak On High Volume

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

  • SNMX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.7 million.
  • SNMX has traded 99,623 shares today.
  • SNMX is trading at 5.06 times the normal volume for the stock at this time of day.
  • SNMX is trading at a new low 3.16% 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 SNMX:

Senomyx, Inc. discovers, develops, and commercializes flavor ingredients for the packaged food, beverage, and ingredient supply industries using proprietary taste receptor-based assays and screening technologies. Currently there are 3 analysts that rate Senomyx a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Senomyx has been 558,200 shares per day over the past 30 days. Senomyx has a market cap of $381.2 million and is part of the basic materials sector and chemicals industry. The stock has a beta of 0.92 and a short float of 15.9% with 10.01 days to cover. Shares are up 75.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Senomyx as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Chemicals industry average. The net income has decreased by 13.4% when compared to the same quarter one year ago, dropping from -$2.33 million to -$2.64 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Chemicals industry and the overall market, SENOMYX INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • SNMX, with its decline in revenue, underperformed when compared the industry average of 7.7%. Since the same quarter one year prior, revenues slightly dropped by 4.2%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
  • SENOMYX INC reported flat earnings per share in the most recent quarter. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, SENOMYX INC reported poor results of -$0.30 versus -$0.24 in the prior year. This year, the market expects an improvement in earnings (-$0.24 versus -$0.30).
  • Compared to its closing price of one year ago, SNMX's share price has jumped by 190.88%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in SNMX do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

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