Trade-Ideas: Pernix Therapeutics Holdings (PTX) Is Today's Strong 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 Pernix Therapeutics Holdings ( PTX) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Pernix Therapeutics Holdings as such a stock due to the following factors:

  • PTX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.9 million.
  • PTX has traded 1.7 million shares today.
  • PTX is trading at 11.94 times the normal volume for the stock at this time of day.
  • PTX is trading at a new high 9.13% 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 PTX:

Pernix Therapeutics Holdings, Inc., a specialty pharmaceutical company, develops, manufactures, markets, and sells branded and generic pharmaceutical products. Currently there are 4 analysts that rate Pernix Therapeutics Holdings a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Pernix Therapeutics Holdings has been 1.1 million shares per day over the past 30 days. Pernix has a market cap of $290.4 million and is part of the health care sector and drugs industry. The stock has a beta of 3.19 and a short float of 43.6% with 4.54 days to cover. Shares are down 26.6% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Pernix Therapeutics Holdings as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Pharmaceuticals industry. The net income has significantly decreased by 148.1% when compared to the same quarter one year ago, falling from -$9.54 million to -$23.67 million.
  • The debt-to-equity ratio is very high at 4.78 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, PTX maintains a poor quick ratio of 0.71, which illustrates the inability to avoid short-term cash problems.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Pharmaceuticals industry and the overall market, PERNIX THERAPEUTICS HOLDINGS's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$19.04 million or 211.27% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • PERNIX THERAPEUTICS HOLDINGS has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, PERNIX THERAPEUTICS HOLDINGS reported poor results of -$0.93 versus -$0.70 in the prior year. This year, the market expects an improvement in earnings ($0.35 versus -$0.93).

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