Strong On High Volume: Cytokinetics (CYTK)

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

  • CYTK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.6 million.
  • CYTK has traded 302,038 shares today.
  • CYTK is trading at 3.89 times the normal volume for the stock at this time of day.
  • CYTK is trading at a new high 14.31% 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 CYTK:

Cytokinetics, Incorporated, a clinical stage biopharmaceutical company, focuses on the discovery and development of novel small molecule therapeutics that modulate muscle function for the potential treatment of serious diseases and medical conditions. Currently there are 2 analysts that rate Cytokinetics a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Cytokinetics has been 290,000 shares per day over the past 30 days. Cytokinetics has a market cap of $179.4 million and is part of the health care sector and drugs industry. The stock has a beta of 1.86 and a short float of 3.9% with 3.47 days to cover. Shares are down 15.1% year-to-date as of the close of trading on Tuesday.

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 Cytokinetics as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • Net operating cash flow has significantly decreased to -$9.52 million or 192.29% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • CYTK has underperformed the S&P 500 Index, declining 23.36% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • 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 52.6% when compared to the same quarter one year prior, rising from -$12.59 million to -$5.97 million.
  • 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, CYTOKINETICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • CYTK has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 6.14, which clearly demonstrates the ability to cover short-term cash needs.

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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