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

  • OREX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $23.7 million.
  • OREX has traded 574,642 shares today.
  • OREX is trading at 2.92 times the normal volume for the stock at this time of day.
  • OREX is trading at a new low 3.00% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in OREX with the Ticky from Trade-Ideas. See the FREE profile for OREX NOW at Trade-Ideas

More details on OREX:

Orexigen Therapeutics, Inc., a biopharmaceutical company, focuses on the development of pharmaceutical product candidates for the treatment of obesity. Currently there are 4 analysts that rate Orexigen Therapeutics a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Orexigen Therapeutics has been 3.7 million shares per day over the past 30 days. Orexigen has a market cap of $785.8 million and is part of the health care sector and drugs industry. The stock has a beta of 3.87 and a short float of 39.9% with 9.47 days to cover. Shares are up 11.7% year-to-date as of the close of trading on Thursday.

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 Orexigen Therapeutics as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow 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, OREXIGEN THERAPEUTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to -$15.48 million or 15.87% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The debt-to-equity ratio is very high at 4.91 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 6.93, which shows the ability to cover short-term cash needs.
  • 42.40% is the gross profit margin for OREXIGEN THERAPEUTICS INC which we consider to be strong. It has increased significantly from the same period last year. Along with this, the net profit margin of 36.53% is above that of the industry average.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, and has traded in line with the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

null

More from Markets

Facebook Stock Set for Biggest Gain in Two Years After Q1 Earnings Top Forecasts

Facebook Stock Set for Biggest Gain in Two Years After Q1 Earnings Top Forecasts

Facebook, Amazon, Microsoft and Ford - 5 Things You Must Know

Facebook, Amazon, Microsoft and Ford - 5 Things You Must Know

Let the Najarian Brothers Crash-Proof Portfolio

Let the Najarian Brothers Crash-Proof Portfolio

Global Stocks Mixed, U.S. Futures Soften as Earnings, Oil, Rates Cloud Sentiment

Global Stocks Mixed, U.S. Futures Soften as Earnings, Oil, Rates Cloud Sentiment

Let the Najarian Brothers Help You Generate Income With Options

Let the Najarian Brothers Help You Generate Income With Options