Intercept Pharmaceuticals (ICPT) Flagged As Strong On High Volume

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

  • ICPT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $104.4 million.
  • ICPT has traded 61,547 shares today.
  • ICPT is trading at 2.09 times the normal volume for the stock at this time of day.
  • ICPT is trading at a new high 3.02% 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 ICPT:

Intercept Pharmaceuticals, Inc., a development stage biopharmaceutical company, focuses on the discovery, development, and commercialization of novel therapeutics to treat chronic liver and intestinal diseases utilizing its proprietary bile acid chemistry. Currently there are 8 analysts that rate Intercept Pharmaceuticals a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Intercept Pharmaceuticals has been 595,600 shares per day over the past 30 days. Intercept has a market cap of $5.9 billion and is part of the health care sector and drugs industry. The stock has a beta of -8.97 and a short float of 22.4% with 6.88 days to cover. Shares are up 56.6% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Intercept Pharmaceuticals as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • Net operating cash flow has significantly decreased to -$29.59 million or 140.25% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • ICPT has underperformed the S&P 500 Index, declining 13.49% 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.
  • INTERCEPT PHARMA 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, INTERCEPT PHARMA INC reported poor results of -$14.42 versus -$3.70 in the prior year. This year, the market expects an improvement in earnings (-$8.54 versus -$14.42).
  • Compared to other companies in the Biotechnology industry and the overall market, INTERCEPT PHARMA INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • ICPT has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign.

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