Trade-Ideas: Acceleron Pharma (XLRN) Is Today's Weak On High Relative Volume Stock

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

  • XLRN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.5 million.
  • XLRN has traded 88,968 shares today.
  • XLRN is trading at 12.46 times the normal volume for the stock at this time of day.
  • XLRN 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 XLRN:

Acceleron Pharma Inc., a clinical stage biopharmaceutical company, focuses on the discovery, development, and commercialization of protein therapeutics for cancer and rare diseases. Currently there are 4 analysts that rate Acceleron Pharma a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Acceleron Pharma has been 221,900 shares per day over the past 30 days. Acceleron has a market cap of $1.1 billion and is part of the health care sector and drugs industry. Shares are down 17.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Acceleron Pharma as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • Net operating cash flow has significantly decreased to -$13.62 million or 898.46% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • XLRN has underperformed the S&P 500 Index, declining 9.76% 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 2.7% when compared to the same quarter one year prior, going from -$18.11 million to -$17.62 million.
  • XLRN, with its very weak revenue results, has greatly underperformed against the industry average of 18.8%. Since the same quarter one year prior, revenues plummeted by 67.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • ACCELERON PHARMA INC has improved earnings per share by 14.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ACCELERON PHARMA INC reported poor results of -$1.62 versus -$1.32 in the prior year. This year, the market expects an improvement in earnings (-$1.40 versus -$1.62).

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