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

  • OREX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.6 million.
  • OREX has traded 310,952 shares today.
  • OREX is trading at 2.46 times the normal volume for the stock at this time of day.
  • OREX is trading at a new low 4.08% 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 OREX with the Ticky from Trade-Ideas. See the FREE profile for OREX NOW at Trade-Ideas

More details on OREX:

Orexigen Therapeutics, Inc., a biopharmaceutical company, focuses on the development of pharmaceutical products in the United States. The company offers Contrave for the treatment of obesity. Currently there are 6 analysts that rate Orexigen Therapeutics a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Orexigen Therapeutics has been 3.5 million shares per day over the past 30 days. Orexigen has a market cap of $643.0 million and is part of the health care sector and drugs industry. The stock has a beta of 2.48 and a short float of 29.1% with 17.94 days to cover. Shares are down 19.1% year-to-date as of the close of trading on Monday.

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 Orexigen Therapeutics as a sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and generally high debt management risk.

Highlights from the ratings report include:
  • OREX has underperformed the S&P 500 Index, declining 16.18% 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 debt-to-equity ratio is very high at 6.93 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 7.47, which shows the ability to cover short-term cash needs.
  • 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, OREXIGEN THERAPEUTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • 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 30.8% when compared to the same quarter one year prior, rising from -$24.90 million to -$17.23 million.
  • OREXIGEN THERAPEUTICS INC has improved earnings per share by 39.1% 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, OREXIGEN THERAPEUTICS INC continued to lose money by earning -$0.35 versus -$0.80 in the prior year. For the next year, the market is expecting a contraction of 60.0% in earnings (-$0.56 versus -$0.35).

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

Global Stocks Weaken as Trump Opens New Fronts in Global Trade War

Global Stocks Weaken as Trump Opens New Fronts in Global Trade War

Week Ahead: Trade Fears and Stress Tests Signal More Volatility To Come

Week Ahead: Trade Fears and Stress Tests Signal More Volatility To Come

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