Tetraphase Pharmaceuticals (TTPH) Weak On High Volume

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

  • TTPH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.9 million.
  • TTPH has traded 95,391 shares today.
  • TTPH is trading at 3.85 times the normal volume for the stock at this time of day.
  • TTPH is trading at a new low 3.02% 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 TTPH:

Tetraphase Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, develops various antibiotics for the treatment of serious and life-threatening multi-drug resistant infections. Currently there are 8 analysts that rate Tetraphase Pharmaceuticals a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Tetraphase Pharmaceuticals has been 619,100 shares per day over the past 30 days. Tetraphase has a market cap of $1.5 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.63 and a short float of 10.2% with 4.79 days to cover. Shares are up 14.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Tetraphase Pharmaceuticals as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share and deteriorating net income.

Highlights from the ratings report include:
  • TETRAPHASE PHARMACEUTICALS's earnings per share declined by 24.5% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, TETRAPHASE PHARMACEUTICALS reported poor results of -$2.48 versus -$1.38 in the prior year. For the next year, the market is expecting a contraction of 4.2% in earnings (-$2.59 versus -$2.48).
  • 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 55.2% when compared to the same quarter one year ago, falling from -$13.52 million to -$20.99 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 Pharmaceuticals industry and the overall market, TETRAPHASE PHARMACEUTICALS's return on equity significantly trails that of both the industry average and the S&P 500.
  • Compared to its closing price of one year ago, TTPH's share price has jumped by 357.48%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in TTPH do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
  • TTPH 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.

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