Strong On High Volume: Galena Biopharma (GALE)

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 Galena Biopharma ( GALE) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Galena Biopharma as such a stock due to the following factors:

  • GALE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.2 million.
  • GALE has traded 604,797 shares today.
  • GALE is trading at 3.13 times the normal volume for the stock at this time of day.
  • GALE is trading at a new high 3.35% 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 GALE:

Galena Biopharma, Inc., a biopharmaceutical company, focuses on developing and commercializing oncology therapeutics that address major unmet medical needs across cancer care. Currently there are 4 analysts that rate Galena Biopharma a buy, 1 analyst rates it a sell, and none rate it a hold.

The average volume for Galena Biopharma has been 3.2 million shares per day over the past 30 days. Galena has a market cap of $274.9 million and is part of the health care sector and drugs industry. The stock has a beta of 0.78 and a short float of 10.8% with 3.89 days to cover. Shares are up 18.5% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Galena Biopharma as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow, generally disappointing historical performance in the stock itself 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 Biotechnology industry. The net income has significantly decreased by 315.5% when compared to the same quarter one year ago, falling from -$2.54 million to -$10.54 million.
  • Net operating cash flow has decreased to -$11.56 million or 43.58% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 34.28%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 300.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • GALENA BIOPHARMA INC 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. 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, GALENA BIOPHARMA INC continued to lose money by earning -$0.30 versus -$0.79 in the prior year. For the next year, the market is expecting a contraction of 6.7% in earnings (-$0.32 versus -$0.30).
  • 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, GALENA BIOPHARMA INC's return on equity significantly trails that of both the industry average and the S&P 500.

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