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 Arrowhead Research ( ARWR) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Arrowhead Research as such a stock due to the following factors:

  • ARWR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $11.8 million.
  • ARWR traded 154,022 shares today in the pre-market hours as of 8:26 AM, representing 10.4% of its average daily volume.

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More details on ARWR:

Arrowhead Research Corporation develops novel drugs to treat intractable diseases in the United States. ARWR has a PE ratio of 6.5. Currently there are 3 analysts that rate Arrowhead Research a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Arrowhead Research has been 2.4 million shares per day over the past 30 days. Arrowhead Research has a market cap of $401.1 million and is part of the health care sector and drugs industry. The stock has a beta of 2.99 and a short float of 26.8% with 9.93 days to cover. Shares are down 0.8% 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 Arrowhead Research as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Biotechnology industry. The net income has significantly decreased by 112.4% when compared to the same quarter one year ago, falling from -$10.63 million to -$22.58 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Biotechnology industry and the overall market, ARROWHEAD RESEARCH 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 -$24.20 million or 244.63% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 64.73%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 46.42% compared to the year-earlier 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.
  • ARROWHEAD RESEARCH CORP's earnings per share declined by 46.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ARROWHEAD RESEARCH CORP continued to lose money by earning -$1.23 versus -$1.32 in the prior year. For the next year, the market is expecting a contraction of 18.7% in earnings (-$1.46 versus -$1.23).

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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