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

  • SPPI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.9 million.
  • SPPI has traded 78,773 shares today.
  • SPPI is trading at 2.22 times the normal volume for the stock at this time of day.
  • SPPI is trading at a new high 3.01% 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 SPPI:

Spectrum Pharmaceuticals, Inc., a biotechnology company, develops and commercializes oncology and hematology drug products. Currently there are 2 analysts that rate Spectrum Pharmaceuticals a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Spectrum Pharmaceuticals has been 1.3 million shares per day over the past 30 days. Spectrum has a market cap of $389.9 million and is part of the health care sector and drugs industry. The stock has a beta of 0.92 and a short float of 37% with 25.14 days to cover. Shares are down 15.9% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Spectrum Pharmaceuticals as a sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • SPPI has underperformed the S&P 500 Index, declining 16.02% 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 92.4% when compared to the same quarter one year prior, rising from -$39.37 million to -$2.98 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Biotechnology industry and the overall market, SPECTRUM PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for SPECTRUM PHARMACEUTICALS INC is currently very high, coming in at 84.69%. Regardless of SPPI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SPPI's net profit margin of -5.73% significantly underperformed when compared to the industry average.
  • Net operating cash flow has increased to $11.02 million or 39.09% when compared to the same quarter last year. Despite an increase in cash flow, SPECTRUM PHARMACEUTICALS INC's average is still marginally south of the industry average growth rate of 47.73%.

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