Today's Weak On High Volume Stock: Lexicon Pharmaceuticals (LXRX)

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

  • LXRX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.2 million.
  • LXRX has traded 66,350 shares today.
  • LXRX is trading at 2.70 times the normal volume for the stock at this time of day.
  • LXRX is trading at a new low 3.24% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in LXRX with the Ticky from Trade-Ideas. See the FREE profile for LXRX NOW at Trade-Ideas

More details on LXRX:

Lexicon Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the discovery and development of pharmaceutical products for the treatment of human diseases. Currently there are 3 analysts that rate Lexicon Pharmaceuticals a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Lexicon Pharmaceuticals has been 354,100 shares per day over the past 30 days. Lexicon has a market cap of $795.8 million and is part of the health care sector and drugs industry. The stock has a beta of 0.99 and a short float of 22.8% with 13.31 days to cover. Shares are up 16.2% year-to-date as of the close of trading on Tuesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Lexicon Pharmaceuticals as a sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • LXRX has underperformed the S&P 500 Index, declining 21.54% 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 8.9% when compared to the same quarter one year prior, going from -$30.84 million to -$28.08 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, LEXICON PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite currently having a low debt-to-equity ratio of 0.42, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
  • LEXICON PHARMACEUTICALS INC has improved earnings per share by 33.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, LEXICON PHARMACEUTICALS INC continued to lose money by earning -$1.33 versus -$1.40 in the prior year. This year, the market expects an improvement in earnings (-$1.26 versus -$1.33).

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

More from Markets

General Electric Booted From Dow, Replaced by Walgreens

General Electric Booted From Dow, Replaced by Walgreens

Dow Plunges on Trade War Worries but Walmart and Verizon Finish Positively

Dow Plunges on Trade War Worries but Walmart and Verizon Finish Positively

Tuesday Turnaround in Politics: Is a Trade War on the Horizon?

Tuesday Turnaround in Politics: Is a Trade War on the Horizon?

FANG Stocks Get Swept Up in Broader Market Selloff

FANG Stocks Get Swept Up in Broader Market Selloff

Snap Shares Plunge After Cowen Cuts Price Target

Snap Shares Plunge After Cowen Cuts Price Target