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

  • RDHL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.9 million.
  • RDHL has traded 67,028 shares today.
  • RDHL is trading at 19.64 times the normal volume for the stock at this time of day.
  • RDHL is trading at a new low 10.19% 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 RDHL:

RedHill Biopharma Ltd., a biopharmaceutical company, focuses on the development and acquisition of late clinical-stage, proprietary, and orally-administered drugs for the treatment of inflammatory and gastrointestinal diseases, including gastrointestinal cancers in Israel. Currently there are 4 analysts that rate Redhill Biopharma a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Redhill Biopharma has been 59,500 shares per day over the past 30 days. Redhill has a market cap of $172.3 million and is part of the health care sector and drugs industry. Shares are up 47.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Redhill Biopharma as a hold. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • RDHL 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.
  • RDHL, with its very weak revenue results, has greatly underperformed against the industry average of 2.1%. Since the same quarter one year prior, revenues plummeted by 100.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • REDHILL BIOPHARMA LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, REDHILL BIOPHARMA LTD continued to lose money by earning -$1.38 versus -$1.70 in the prior year. For the next year, the market is expecting a contraction of 34.0% in earnings (-$1.85 versus -$1.38).
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Pharmaceuticals industry and the overall market, REDHILL BIOPHARMA LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$3.37 million or 301.19% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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