Anacor Pharmaceuticals (ANAC) Is Today's Strong On High Volume Stock

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

  • ANAC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $38.2 million.
  • ANAC has traded 155,845 shares today.
  • ANAC is trading at 2.21 times the normal volume for the stock at this time of day.
  • ANAC is trading at a new high 3.00% 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 ANAC:

Anacor Pharmaceuticals, Inc., a biopharmaceutical company, focuses on discovering, developing, and commercializing novel small-molecule therapeutics derived from its boron chemistry platform. It markets KERYDIN (tavaborole) topical solution for the treatment of onychomycosis of the toenails. Currently there are 4 analysts that rate Anacor Pharmaceuticals a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Anacor Pharmaceuticals has been 610,400 shares per day over the past 30 days. Anacor has a market cap of $3.4 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.48 and a short float of 9.6% with 7.45 days to cover. Shares are up 137.4% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Anacor Pharmaceuticals as a sell. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity.

Highlights from the ratings report include:
  • 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 Biotechnology industry and the overall market, ANACOR PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The company, on the basis of net income growth 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 increased by 38.8% when compared to the same quarter one year prior, rising from -$21.17 million to -$12.96 million.
  • ANACOR PHARMACEUTICALS INC has improved earnings per share by 41.2% 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, ANACOR PHARMACEUTICALS INC swung to a loss, reporting -$2.07 versus $1.82 in the prior year. This year, the market expects an improvement in earnings (-$1.16 versus -$2.07).
  • Net operating cash flow has significantly increased by 127.94% to $5.68 million when compared to the same quarter last year. Despite an increase in cash flow, ANACOR PHARMACEUTICALS INC's cash flow growth rate is still lower than the industry average growth rate of 156.02%.
  • ANAC's debt-to-equity ratio of 0.78 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 4.39 is very high and demonstrates very strong liquidity.

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