Strong On High Relative Volume: Alkermes (ALKS)

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

  • ALKS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $44.4 million.
  • ALKS has traded 342,915 shares today.
  • ALKS is trading at 4.64 times the normal volume for the stock at this time of day.
  • ALKS is trading at a new high 3.06% 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 ALKS:

Alkermes Public Limited Company, an integrated biopharmaceutical company, engages in the research, development, and commercialization of pharmaceutical products to address unmet medical needs of patients in various therapeutic areas. Currently there are 5 analysts that rate Alkermes a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Alkermes has been 1.1 million shares per day over the past 30 days. Alkermes has a market cap of $8.7 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.31 and a short float of 8.5% with 10.28 days to cover. Shares are up 0.2% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Alkermes as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • ALKERMES PLC's earnings per share declined by 23.5% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, ALKERMES PLC swung to a loss, reporting -$0.22 versus $0.13 in the prior year. For the next year, the market is expecting a contraction of 88.6% in earnings (-$0.42 versus -$0.22).
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Biotechnology industry average. The net income has significantly decreased by 25.9% when compared to the same quarter one year ago, falling from -$24.35 million to -$30.66 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Biotechnology industry and the overall market, ALKERMES PLC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ALKERMES PLC is currently very high, coming in at 79.71%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -19.01% is in-line with the industry average.
  • Net operating cash flow has significantly increased by 159.82% to $2.08 million when compared to the same quarter last year. In addition, ALKERMES PLC has also modestly surpassed the industry average cash flow growth rate of 155.59%.

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