Trade-Ideas: BioDelivery Sciences International (BDSI) Is Today's Strong On High Relative 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 BioDelivery Sciences International ( BDSI) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified BioDelivery Sciences International as such a stock due to the following factors:

  • BDSI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.6 million.
  • BDSI has traded 370,522 shares today.
  • BDSI is trading at 3.77 times the normal volume for the stock at this time of day.
  • BDSI is trading at a new high 3.03% 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 BDSI:

BioDelivery Sciences International, Inc., a specialty pharmaceutical company, engages in the development and commercialization of pharmaceutical products principally in the areas of pain management and addiction. Currently there are 7 analysts that rate BioDelivery Sciences International a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for BioDelivery Sciences International has been 1.4 million shares per day over the past 30 days. BioDelivery Sciences International has a market cap of $403.0 million and is part of the health care sector and drugs industry. The stock has a beta of 1.29 and a short float of 17.8% with 7.45 days to cover. Shares are down 36% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates BioDelivery Sciences International as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

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 when compared to that of the S&P 500 and the Pharmaceuticals industry. The net income has significantly decreased by 76.4% when compared to the same quarter one year ago, falling from -$4.64 million to -$8.19 million.
  • 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, BIODELIVERY SCIENCES INTL'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 -$5.01 million or 919.14% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 33.28%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 45.45% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The revenue fell significantly faster than the industry average of 1.9%. Since the same quarter one year prior, revenues fell by 36.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

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