Strong On High Relative Volume: Geron (GERN)

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

  • GERN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $26.6 million.
  • GERN has traded 1.3 million shares today.
  • GERN is trading at 3.18 times the normal volume for the stock at this time of day.
  • GERN is trading at a new high 5.23% 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 GERN:

Geron Corporation, a clinical stage biopharmaceutical company, develops a telomerase inhibitor, imetelstat, to treat hematologic myeloid malignancies. The company was founded in 1990 and is based in Menlo Park, California. Currently there are 3 analysts that rate Geron a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Geron has been 3.5 million shares per day over the past 30 days. Geron has a market cap of $488.9 million and is part of the health care sector and drugs industry. The stock has a beta of 2.89 and a short float of 20.3% with 3.55 days to cover. Shares are down 31.4% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Geron as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Biotechnology industry. The net income has decreased by 15.7% when compared to the same quarter one year ago, dropping from -$8.25 million to -$9.55 million.
  • GERN's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 53.34%, which is also worse than the performance of the S&P 500 Index. 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 company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Biotechnology industry and the overall market, GERON CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The revenue fell significantly faster than the industry average of 41.4%. Since the same quarter one year prior, revenues fell by 11.6%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
  • GERON CORP reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GERON CORP continued to lose money by earning -$0.29 versus -$0.54 in the prior year. This year, the market expects an improvement in earnings (-$0.24 versus -$0.29).

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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