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

  • NKTR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $17.0 million.
  • NKTR has traded 100,168 shares today.
  • NKTR is trading at 2.41 times the normal volume for the stock at this time of day.
  • NKTR is trading at a new low 3.05% 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 NKTR:

Nektar Therapeutics, a clinical-stage biopharmaceutical company, develops drug candidates that utilize its PEGylation and polymer conjugate technology platforms in the United States. Currently there are 7 analysts that rate Nektar Therapeutics a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Nektar Therapeutics has been 1.3 million shares per day over the past 30 days. Nektar has a market cap of $1.6 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.44 and a short float of 10.5% with 8.15 days to cover. Shares are up 17% year-to-date as of the close of trading on Thursday.

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 Nektar Therapeutics as a sell. The area that we feel has been the company's primary weakness has been its meager revenue growth.

Highlights from the ratings report include:
  • NKTR, with its decline in revenue, underperformed when compared the industry average of 5.0%. Since the same quarter one year prior, revenues fell by 15.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Net operating cash flow has significantly increased by 73.54% to -$9.09 million when compared to the same quarter last year. In addition, NEKTAR THERAPEUTICS has also vastly surpassed the industry average cash flow growth rate of -1.32%.
  • This stock has increased by 31.97% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in NKTR do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
  • NEKTAR THERAPEUTICS has improved earnings per share by 29.7% in the most recent quarter compared to the same quarter a year ago. 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, NEKTAR THERAPEUTICS continued to lose money by earning -$1.40 versus -$1.50 in the prior year. This year, the market expects an improvement in earnings (-$0.66 versus -$1.40).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Pharmaceuticals industry average. The net income increased by 23.6% when compared to the same quarter one year prior, going from -$42.75 million to -$32.64 million.

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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