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

  • RMTI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.0 million.
  • RMTI has traded 350,500 shares today.
  • RMTI is trading at 12.66 times the normal volume for the stock at this time of day.
  • RMTI is trading at a new high 6.17% 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 RMTI:

Rockwell Medical, Inc. operates as an integrated biopharmaceutical company in the United States and internationally. It offers products and services for the treatment of end-stage renal disease, chronic kidney disease (CKD), iron deficiency, secondary hyperparathyroidism, and hemodialysis. Currently there are 2 analysts that rate Rockwell Medical a buy, 2 analysts rate it a sell, and none rate it a hold.

The average volume for Rockwell Medical has been 438,100 shares per day over the past 30 days. Rockwell Medical has a market cap of $356.6 million and is part of the health care sector and drugs industry. The stock has a beta of 1.71 and a short float of 20.7% with 12.26 days to cover. Shares are down 16.5% year-to-date as of the close of trading on Monday.

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 Rockwell Medical as a sell. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • The gross profit margin for ROCKWELL MEDICAL INC is rather low; currently it is at 17.39%. Regardless of RMTI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, RMTI's net profit margin of -24.32% significantly underperformed when compared to the industry average.
  • RMTI has underperformed the S&P 500 Index, declining 17.07% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • ROCKWELL MEDICAL INC reported significant earnings per share improvement 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, ROCKWELL MEDICAL INC continued to lose money by earning -$1.65 versus -$2.64 in the prior year. This year, the market expects an improvement in earnings (-$0.43 versus -$1.65).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income increased by 73.3% when compared to the same quarter one year prior, rising from -$11.86 million to -$3.17 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 3.7%. Since the same quarter one year prior, revenues slightly increased by 0.4%. Growth in the company's revenue appears to have helped boost the earnings per share.

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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