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

  • RMTI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $10.4 million.
  • RMTI has traded 131,520 shares today.
  • RMTI is trading at 2.72 times the normal volume for the stock at this time of day.
  • RMTI is trading at a new low 3.02% 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 RMTI:

Rockwell Medical, Inc. operates as an integrated biopharmaceutical company in the United States and internationally. It offers products and services for the treatment of end-stage renal disease, chronic kidney disease, iron deficiency, secondary hyperparathyroidism, and hemodialysis. Currently there are 3 analysts that rate Rockwell Medical a buy, 1 analyst rates it a sell, and none rate it a hold.

The average volume for Rockwell Medical has been 524,800 shares per day over the past 30 days. Rockwell Medical has a market cap of $703.3 million and is part of the health care sector and drugs industry. The stock has a beta of 1.51 and a short float of 24.3% with 15.58 days to cover. Shares are up 36.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Rockwell Medical as a sell. Among the areas we feel are negative, one of the most important has been poor profit margins.

Highlights from the ratings report include:
  • The gross profit margin for ROCKWELL MEDICAL INC is rather low; currently it is at 18.16%. Regardless of RMTI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, RMTI's net profit margin of -26.64% significantly underperformed when compared to the industry average.
  • Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, ROCKWELL MEDICAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 68.02% to -$3.31 million when compared to the same quarter last year. In addition, ROCKWELL MEDICAL INC has also vastly surpassed the industry average cash flow growth rate of 5.83%.
  • Looking at where the stock is today compared to one year ago, we find that it is higher, and it has outperformed the rise in the S&P 500 over the same period. 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.
  • ROCKWELL MEDICAL INC reported significant earnings per share improvement 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. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, ROCKWELL MEDICAL INC continued to lose money by earning -$0.52 versus -$1.65 in the prior year. This year, the market expects an improvement in earnings (-$0.10 versus -$0.52).

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