Strong On High Volume: IGI (IG)

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

  • IG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.6 million.
  • IG has traded 491,999 shares today.
  • IG is trading at 14.35 times the normal volume for the stock at this time of day.
  • IG is trading at a new high 11.01% 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 IG:

IGI Laboratories, Inc. develops, manufactures, and markets topical formulations in the United States. The company sells its generic topical pharmaceutical products under the IGI label. Currently there are 3 analysts that rate IGI a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for IGI has been 776,300 shares per day over the past 30 days. IGI has a market cap of $387.3 million and is part of the health care sector and drugs industry. The stock has a beta of 0.55 and a short float of 1.9% with 2.69 days to cover. Shares are up 144.3% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates IGI as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.

Highlights from the ratings report include:
  • IG's very impressive revenue growth greatly exceeded the industry average of 8.7%. Since the same quarter one year prior, revenues leaped by 69.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • Compared to its closing price of one year ago, IG's share price has jumped by 300.52%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • Despite currently having a low debt-to-equity ratio of 0.38, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that IG's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.52 is high and demonstrates strong liquidity.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Personal Products industry average, but is greater than that of the S&P 500. The net income increased by 14.4% when compared to the same quarter one year prior, going from -$0.40 million to -$0.35 million.
  • Net operating cash flow has significantly decreased to -$0.53 million or 182.89% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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