Trade-Ideas: Raptor Pharmaceutical (RPTP) Is Today's Strong On High Relative Volume Stock

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

  • RPTP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.2 million.
  • RPTP has traded 132,948 shares today.
  • RPTP is trading at 3.84 times the normal volume for the stock at this time of day.
  • RPTP is trading at a new high 4.15% 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 RPTP:

Raptor Pharmaceuticals Corp., a biopharmaceutical company, focuses on developing and commercializing life-altering therapeutics that treat debilitating and often fatal diseases. Currently there are 2 analysts that rate Raptor Pharmaceutical a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Raptor Pharmaceutical has been 659,800 shares per day over the past 30 days. Raptor has a market cap of $593.7 million and is part of the health care sector and drugs industry. The stock has a beta of 0.55 and a short float of 25.2% with 15.02 days to cover. Shares are down 28.3% 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 Raptor Pharmaceutical as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself 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, RAPTOR PHARMACEUTICAL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$10.88 million or 81.62% 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 6.75 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 4.26, which shows the ability to cover short-term cash needs.
  • RPTP's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 31.43%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • RAPTOR PHARMACEUTICAL CORP reported significant earnings per share improvement 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, RAPTOR PHARMACEUTICAL CORP reported poor results of -$1.22 versus -$0.81 in the prior year. This year, the market expects an improvement in earnings (-$0.71 versus -$1.22).

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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