Strong On High Relative Volume: Geron (GERN)

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

  • GERN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.6 million.
  • GERN has traded 299,708 shares today.
  • GERN is trading at 2.08 times the normal volume for the stock at this time of day.
  • GERN is trading at a new high 3.24% 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 GERN:

Geron Corporation, a clinical stage biopharmaceutical company, focuses on the development of telomerase inhibitor, imetelstat, for treating hematologic myeloid malignancies. It has collaboration and license agreement with Janssen Biotech, Inc. Currently there are 2 analysts that rate Geron a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Geron has been 2.3 million shares per day over the past 30 days. Geron has a market cap of $635.5 million and is part of the health care sector and drugs industry. The stock has a beta of 1.92 and a short float of 19.6% with 11.30 days to cover. Shares are up 23.4% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

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

Highlights from the ratings report include:
  • The company, on the basis of change in net income 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 has decreased by 10.4% when compared to the same quarter one year ago, dropping from -$8.44 million to -$9.32 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Biotechnology industry and the overall market, GERON CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to -$7.71 million or 18.93% when compared to the same quarter last year. Despite an increase in cash flow of 18.93%, GERON CORP is still growing at a significantly lower rate than the industry average of 156.02%.
  • GERON CORP reported flat earnings per share in the most recent quarter. 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, GERON CORP continued to lose money by earning -$0.24 versus -$0.29 in the prior year. This year, the market expects an improvement in earnings (-$0.03 versus -$0.24).
  • Compared to its closing price of one year ago, GERN's share price has jumped by 37.67%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in GERN do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

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