Weak On High Volume: Retrophin (RTRX)

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

  • RTRX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $17.0 million.
  • RTRX has traded 93,767 shares today.
  • RTRX is trading at 4.93 times the normal volume for the stock at this time of day.
  • RTRX is trading at a new low 3.03% 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 RTRX with the Ticky from Trade-Ideas. See the FREE profile for RTRX NOW at Trade-Ideas

More details on RTRX:

Retrophin, Inc., a biopharmaceutical company, focuses on the development, acquisition, and commercialization of therapies for the treatment of serious, catastrophic, or rare diseases. RTRX has a PE ratio of 96. Currently there are 2 analysts that rate Retrophin a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Retrophin has been 628,500 shares per day over the past 30 days. Retrophin has a market cap of $939.4 million and is part of the health care sector and drugs industry. The stock has a beta of 0.42 and a short float of 9.9% with 6.00 days to cover. Shares are up 145.5% year-to-date as of the close of trading on Wednesday.

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 Retrophin as a sell. The area that we feel has been the company's primary weakness has been its generally higher debt management risk.

Highlights from the ratings report include:
  • Despite currently having a low debt-to-equity ratio of 0.50, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.32 is sturdy.
  • Compared to other companies in the Biotechnology industry and the overall market, RETROPHIN INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to -$7.33 million or 25.21% when compared to the same quarter last year. Despite an increase in cash flow of 25.21%, RETROPHIN INC is still growing at a significantly lower rate than the industry average of 146.20%.
  • RETROPHIN INC reported significant earnings per share improvement 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, RETROPHIN INC reported poor results of -$6.15 versus -$2.27 in the prior year. This year, the market expects an improvement in earnings ($0.09 versus -$6.15).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Biotechnology industry. The net income increased by 152.3% when compared to the same quarter one year prior, rising from -$75.74 million to $39.66 million.

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

Trump Takes Aim at Auto Imports; Markets End Mixed -- ICYMI

Trump Takes Aim at Auto Imports; Markets End Mixed -- ICYMI

Video: What Oprah's Content Partnership With Apple Means for the Rest of Tech

Video: What Oprah's Content Partnership With Apple Means for the Rest of Tech

REPLAY: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat

REPLAY: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat

Flashback Friday: The Market Movers

Flashback Friday: The Market Movers

OPEC Deal Doesn't Boost Production Enough to Drive Down Crude, Gasoline Prices

OPEC Deal Doesn't Boost Production Enough to Drive Down Crude, Gasoline Prices