Sorrento Therapeutics (SRNE) Highlighted As 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 Sorrento Therapeutics ( SRNE) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Sorrento Therapeutics as such a stock due to the following factors:

  • SRNE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.9 million.
  • SRNE has traded 91,363 shares today.
  • SRNE is trading at 2.60 times the normal volume for the stock at this time of day.
  • SRNE is trading at a new low 3.03% 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 SRNE:

Sorrento Therapeutics, Inc., a biopharmaceutical company, focuses on the discovery, acquisition, development, and commercialization of proprietary drug therapeutics for addressing unmet medical needs in the United States, Europe, and internationally. Currently there are 3 analysts that rate Sorrento Therapeutics a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Sorrento Therapeutics has been 460,500 shares per day over the past 30 days. Sorrento has a market cap of $511.0 million and is part of the health care sector and drugs industry. The stock has a beta of 0.94 and a short float of 2.2% with 1.05 days to cover. Shares are up 67% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Sorrento Therapeutics as a sell. Among the areas we feel are negative, one of the most important has been generally deteriorating net income.

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 3.4% when compared to the same quarter one year ago, dropping from -$10.09 million to -$10.44 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Biotechnology industry and the overall market, SORRENTO THERAPEUTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has slightly increased to -$8.85 million or 3.03% when compared to the same quarter last year. Despite an increase in cash flow of 3.03%, SORRENTO THERAPEUTICS INC is still growing at a significantly lower rate than the industry average of 156.02%.
  • SORRENTO THERAPEUTICS INC has improved earnings per share by 34.1% 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, SORRENTO THERAPEUTICS INC reported poor results of -$1.32 versus -$1.30 in the prior year. This year, the market expects an improvement in earnings (-$1.01 versus -$1.32).
  • This stock has increased by 147.15% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in SRNE 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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