Sucampo Pharmaceuticals (SCMP) Strong On High Relative 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 Sucampo Pharmaceuticals ( SCMP) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Sucampo Pharmaceuticals as such a stock due to the following factors:

  • SCMP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.9 million.
  • SCMP has traded 51,124 shares today.
  • SCMP is trading at 6.82 times the normal volume for the stock at this time of day.
  • SCMP is trading at a new high 3.02% 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 SCMP:

Sucampo Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the research, discovery, development, and commercialization of proprietary drugs based on prostones and other drug technologies in the Americas, Europe, and Asia. SCMP has a PE ratio of 100.1. Currently there are 3 analysts that rate Sucampo Pharmaceuticals a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Sucampo Pharmaceuticals has been 171,400 shares per day over the past 30 days. Sucampo has a market cap of $577.0 million and is part of the health care sector and drugs industry. The stock has a beta of 3.01 and a short float of 15.8% with 5.59 days to cover. Shares are up 40.5% year-to-date as of the close of trading on Wednesday.

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 Sucampo Pharmaceuticals as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 8.8%. Since the same quarter one year prior, revenues rose by 48.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.67, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with this, the company maintains a quick ratio of 2.65, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has significantly increased by 251.01% to $3.44 million when compared to the same quarter last year. In addition, SUCAMPO PHARMACEUTICALS INC has also vastly surpassed the industry average cash flow growth rate of -19.56%.
  • The gross profit margin for SUCAMPO PHARMACEUTICALS INC is currently very high, coming in at 84.19%. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, SCMP's net profit margin of 4.70% significantly trails the industry average.
  • Compared to its closing price of one year ago, SCMP's share price has jumped by 54.13%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

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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