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

  • UNIS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.5 million.
  • UNIS has traded 117,359 shares today.
  • UNIS is trading at 2.82 times the normal volume for the stock at this time of day.
  • UNIS is trading at a new low 3.16% 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 UNIS:

Unilife Corporation designs, manufactures, and supplies injectable drug delivery systems in the United States and internationally. Currently there are 5 analysts that rate Unilife a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Unilife has been 1.1 million shares per day over the past 30 days. Unilife has a market cap of $395.0 million and is part of the health care sector and health services industry. The stock has a beta of -0.18 and a short float of 18.8% with 22.81 days to cover. Shares are down 14.9% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Unilife as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally high debt management risk 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 Health Care Equipment & Supplies industry. The net income has significantly decreased by 52.9% when compared to the same quarter one year ago, falling from -$15.11 million to -$23.11 million.
  • 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 Health Care Equipment & Supplies industry and the overall market, UNILIFE CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The debt-to-equity ratio is very high at 18.93 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 2.68, which shows the ability to cover short-term cash needs.
  • UNILIFE CORP's earnings per share declined by 33.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, UNILIFE CORP continued to lose money by earning -$0.59 versus -$0.78 in the prior year. For the next year, the market is expecting a contraction of 6.8% in earnings (-$0.63 versus -$0.59).
  • The gross profit margin for UNILIFE CORP is currently very high, coming in at 100.00%. UNIS has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, UNIS's net profit margin of -790.99% significantly underperformed when compared to the industry average.

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