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

  • INSY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.9 million.
  • INSY has traded 175,452 shares today.
  • INSY is trading at 3.82 times the normal volume for the stock at this time of day.
  • INSY is trading at a new low 8.01% 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 INSY:

Insys Therapeutics, Inc., a specialty pharmaceutical company, develops and commercializes supportive care products. INSY has a PE ratio of 81. Currently there are 3 analysts that rate Insys Therapeutics a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Insys Therapeutics has been 1.0 million shares per day over the past 30 days. Insys has a market cap of $3.0 billion and is part of the health care sector and drugs industry. The stock has a beta of -1.54 and a short float of 61.1% with 21.73 days to cover. Shares are up 107.9% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Insys Therapeutics as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • INSY's very impressive revenue growth greatly exceeded the industry average of 22.0%. Since the same quarter one year prior, revenues leaped by 70.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • INSY has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, INSY has a quick ratio of 2.31, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has significantly increased by 139.41% to $16.19 million when compared to the same quarter last year. In addition, INSYS THERAPEUTICS INC has also modestly surpassed the industry average cash flow growth rate of 133.59%.
  • The gross profit margin for INSYS THERAPEUTICS INC is currently very high, coming in at 92.65%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, INSY's net profit margin of 11.33% significantly trails the industry average.
  • Compared to its closing price of one year ago, INSY's share price has jumped by 224.17%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

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