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

  • PRXL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $32.1 million.
  • PRXL has traded 273,274 shares today.
  • PRXL is trading at 7.53 times the normal volume for the stock at this time of day.
  • PRXL is trading at a new low 6.04% 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 PRXL:

PAREXEL International Corporation is a biopharmaceutical outsourcing services company. PRXL has a PE ratio of 26. Currently there are 5 analysts that rate Parexel International a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Parexel International has been 456,500 shares per day over the past 30 days. Parexel International has a market cap of $4.0 billion and is part of the health care sector and health services industry. The stock has a beta of 0.50 and a short float of 7.8% with 7.98 days to cover. Shares are up 30.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Parexel International as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 27.85% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, PRXL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • PAREXEL INTERNATIONAL CORP has improved earnings per share by 13.3% 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. During the past fiscal year, PAREXEL INTERNATIONAL CORP increased its bottom line by earning $2.24 versus $1.63 in the prior year. This year, the market expects an improvement in earnings ($2.75 versus $2.24).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Life Sciences Tools & Services industry. The net income increased by 8.6% when compared to the same quarter one year prior, going from $34.74 million to $37.74 million.
  • The debt-to-equity ratio is somewhat low, currently at 0.63, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.48, which illustrates the ability to avoid short-term cash problems.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Life Sciences Tools & Services industry and the overall market, PAREXEL INTERNATIONAL CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.

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