Cerus (CERS) Stock: Weak On High Volume Today

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

  • CERS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.1 million.
  • CERS has traded 129,758 shares today.
  • CERS is trading at 2.40 times the normal volume for the stock at this time of day.
  • CERS is trading at a new low 7.09% 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 CERS:

Cerus Corporation, together with its subsidiary, Cerus Europe B.V., operates as a biomedical products company in Europe, the Commonwealth of Independent States, and the Middle East. The company develops and commercializes the INTERCEPT Blood System to enhance blood safety. Currently there are 2 analysts that rate Cerus a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Cerus has been 864,200 shares per day over the past 30 days. Cerus has a market cap of $308.0 million and is part of the health care sector and drugs industry. The stock has a beta of 2.54 and a short float of 19% with 14.76 days to cover. Shares are down 36.6% year-to-date as of the close of trading on Tuesday.

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 Cerus as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself, deteriorating net income and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • 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 Health Care Equipment & Supplies industry and the overall market, CERUS CORP'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 -$9.61 million or 68.94% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 31.54%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 60.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The change in net income from the same quarter one year ago has exceeded that of the Health Care Equipment & Supplies industry average, but is less than that of the S&P 500. The net income has decreased by 12.9% when compared to the same quarter one year ago, dropping from -$6.72 million to -$7.59 million.
  • CERUS CORP 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, CERUS CORP reported poor results of -$0.64 versus -$0.36 in the prior year. This year, the market expects an improvement in earnings (-$0.51 versus -$0.64).

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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