Today's Weak On High Volume Stock: IsoRay (ISR)

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

  • ISR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.6 million.
  • ISR has traded 991,994 shares today.
  • ISR is trading at 2.90 times the normal volume for the stock at this time of day.
  • ISR is trading at a new low 8.24% 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 ISR:

IsoRay, Inc develops, manufactures, and sells isotope-based medical products and devices for the treatment of cancer and other malignant diseases in the United States. Currently there is 1 analyst that rates IsoRay a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for IsoRay has been 717,200 shares per day over the past 30 days. IsoRay has a market cap of $101.0 million and is part of the health care sector and health services industry. The stock has a beta of -4.34 and a short float of 6.7% with 1.92 days to cover. Shares are up 26% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates IsoRay as a sell. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • The gross profit margin for ISORAY INC is currently extremely low, coming in at 10.98%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -85.08% is significantly below that of the industry average.
  • ISR's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 31.09%, which is also worse than the performance of the S&P 500 Index. 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.
  • 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 2.1% when compared to the same quarter one year prior, going from -$0.93 million to -$0.91 million.
  • 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, ISORAY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • ISR, with its decline in revenue, underperformed when compared the industry average of 18.8%. Since the same quarter one year prior, revenues slightly dropped by 1.8%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.

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