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

  • CYTR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.6 million.
  • CYTR has traded 581,814 shares today.
  • CYTR is trading at 6.08 times the normal volume for the stock at this time of day.
  • CYTR is trading at a new high 17.03% 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 CYTR:

CytRx Corporation operates as a biopharmaceutical research and development company specializing in oncology. Currently there are 3 analysts that rate CytRx a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for CytRx has been 1.0 million shares per day over the past 30 days. CytRx has a market cap of $244.6 million and is part of the health care sector and drugs industry. The stock has a beta of 1.15 and a short float of 22.1% with 6.41 days to cover. Shares are up 35% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates CytRx as a sell. Among the areas we feel are negative, one of the most important has been weak operating cash flow.

Highlights from the ratings report include:
  • Net operating cash flow has decreased to -$11.79 million or 38.01% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • 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 Biotechnology industry and the overall market, CYTRX CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • CYTRX CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, CYTRX CORP continued to lose money by earning -$0.54 versus -$1.35 in the prior year. For the next year, the market is expecting a contraction of 62.0% in earnings (-$0.88 versus -$0.54).
  • Along with the stagnant revenue growth, the company underperformed against the industry average of 21.4%. Since the same quarter one year prior, revenues have remained constant. The stagnant revenue growth has not kept the company from increasing earnings per share.
  • CYTR has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.50, which clearly demonstrates the ability to cover short-term cash needs.

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