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

  • ARIA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $47.8 million.
  • ARIA has traded 660,235 shares today.
  • ARIA is trading at 2.40 times the normal volume for the stock at this time of day.
  • ARIA is trading at a new high 4.04% 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 ARIA:

ARIAD Pharmaceuticals, Inc., an oncology company, is engaged in the discovery, development, and commercialization of medicines for cancer patients. Currently there are 6 analysts that rate ARIAD Pharmaceuticals a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for ARIAD Pharmaceuticals has been 6.5 million shares per day over the past 30 days. ARIAD has a market cap of $1.4 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.78 and a short float of 28.3% with 7.16 days to cover. Shares are up 4.2% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates ARIAD Pharmaceuticals as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally high debt management risk.

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 Biotechnology industry and the overall market, ARIAD PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Currently the debt-to-equity ratio of 1.91 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 3.85, which shows the ability to cover short-term cash needs.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Biotechnology industry average, but is greater than that of the S&P 500. The net income increased by 24.5% when compared to the same quarter one year prior, going from -$66.34 million to -$50.11 million.
  • The revenue fell significantly faster than the industry average of 40.4%. Since the same quarter one year prior, revenues fell by 12.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • ARIAD PHARMACEUTICALS INC has improved earnings per share by 25.0% in the most recent quarter compared to the same quarter a year ago. 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, ARIAD PHARMACEUTICALS INC reported poor results of -$1.49 versus -$1.34 in the prior year. This year, the market expects an improvement in earnings (-$1.12 versus -$1.49).

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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