Cambrex (CBM) 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.

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

  • CBM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.1 million.
  • CBM has traded 127,910 shares today.
  • CBM is trading at 5.39 times the normal volume for the stock at this time of day.
  • CBM is trading at a new low 3.17% 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 CBM:

Cambrex Corporation, a life sciences company, provides various products and services for the development and commercialization of new and generic therapeutics worldwide. CBM has a PE ratio of 21.9. Currently there is 1 analyst that rates Cambrex a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Cambrex has been 490,500 shares per day over the past 30 days. Cambrex has a market cap of $1.3 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.81 and a short float of 1.4% with 1.82 days to cover. Shares are up 86.7% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Cambrex as a buy. 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, notable return on equity, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.2%. Since the same quarter one year prior, revenues rose by 25.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CBM's debt-to-equity ratio is very low at 0.24 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.35, which illustrates the ability to avoid short-term cash problems.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Life Sciences Tools & Services industry and the overall market, CAMBREX CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • 39.68% is the gross profit margin for CAMBREX CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 21.56% is above that of the industry average.

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