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

  • PCRX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $60.2 million.
  • PCRX has traded 121,063 shares today.
  • PCRX is trading at 4.62 times the normal volume for the stock at this time of day.
  • PCRX is trading at a new low 3.13% 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 PCRX:

Pacira Pharmaceuticals, Inc., a specialty pharmaceutical company, develops, commercializes, and manufactures pharmaceutical products primarily for use in hospitals and ambulatory surgery centers worldwide. Currently there are 6 analysts that rate Pacira Pharmaceuticals a buy, 1 analyst rates it a sell, and none rate it a hold.

The average volume for Pacira Pharmaceuticals has been 483,800 shares per day over the past 30 days. Pacira has a market cap of $4.2 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.79 and a short float of 20.7% with 6.09 days to cover. Shares are up 4.1% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Pacira Pharmaceuticals as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:
  • PCRX's very impressive revenue growth greatly exceeded the industry average of 13.6%. Since the same quarter one year prior, revenues leaped by 84.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.60, 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 the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.29, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for PACIRA PHARMACEUTICALS INC is rather high; currently it is at 69.30%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.38% trails the industry average.
  • 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 Pharmaceuticals industry and the overall market, PACIRA PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.

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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