Trade-Ideas: Inovio Pharmaceuticals (INO) Is Today's Weak On High Relative Volume Stock

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

  • INO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $11.9 million.
  • INO has traded 1.1 million shares today.
  • INO is trading at 7.20 times the normal volume for the stock at this time of day.
  • INO is trading at a new low 3.10% 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 INO:

Inovio Pharmaceuticals, Inc., a clinical stage biopharmaceutical company, develops active DNA immunotherapies and vaccines in combination with proprietary electroporation delivery devices to prevent and treat cancers and infectious diseases. Currently there are 6 analysts that rate Inovio Pharmaceuticals a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Inovio Pharmaceuticals has been 1.4 million shares per day over the past 30 days. Inovio has a market cap of $617.6 million and is part of the health care sector and drugs industry. The stock has a beta of 3.33 and a short float of 22.7% with 9.52 days to cover. Shares are down 1.6% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Inovio Pharmaceuticals as a sell. Among the areas we feel are negative, one of the most important has been weak operating cash flow.

Highlights from the ratings report include:
  • Net operating cash flow has significantly decreased to -$12.07 million or 117.16% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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, INOVIO PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • In its most recent trading session, INO has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • 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 2.2% when compared to the same quarter one year prior, going from -$10.82 million to -$10.58 million.
  • INOVIO PHARMACEUTICALS INC has improved earnings per share by 10.0% 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 year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, INOVIO PHARMACEUTICALS INC continued to lose money by earning -$0.63 versus -$1.40 in the prior year. For the next year, the market is expecting a contraction of 1.6% in earnings (-$0.64 versus -$0.63).

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