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

  • CELG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $677.9 million.
  • CELG has traded 1.3 million shares today.
  • CELG is trading at 3.52 times the normal volume for the stock at this time of day.
  • CELG is trading at a new low 4.01% 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 CELG:

Celgene Corporation, a biopharmaceutical company, discovers, develops, and commercializes therapies to treat cancer and immune-inflammatory related diseases in the United States and internationally. CELG has a PE ratio of 61.0. Currently there are 17 analysts that rate Celgene a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Celgene has been 5.1 million shares per day over the past 30 days. Celgene has a market cap of $93.0 billion and is part of the health care sector and drugs industry. The stock has a beta of 2.00 and a short float of 1.4% with 1.79 days to cover. Shares are up 38.7% year-to-date as of the close of trading on Friday.

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 Celgene as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, solid stock price performance, growth in earnings per share and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • Powered by its strong earnings growth of 40.22% and other important driving factors, this stock has surged by 43.37% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • CELGENE CORP has improved earnings per share by 40.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CELGENE CORP increased its bottom line by earning $1.69 versus $1.65 in the prior year. This year, the market expects an improvement in earnings ($3.70 versus $1.69).
  • CELG's revenue growth trails the industry average of 40.9%. Since the same quarter one year prior, revenues rose by 18.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Biotechnology industry and the overall market, CELGENE CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • The gross profit margin for CELGENE CORP is currently very high, coming in at 96.45%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 25.65% trails the industry average.

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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