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

  • ARRY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.1 million.
  • ARRY has traded 320,570 shares today.
  • ARRY is trading at 3.15 times the normal volume for the stock at this time of day.
  • ARRY is trading at a new low 3.17% 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 ARRY:

Array BioPharma Inc., a biopharmaceutical company, focuses on the discovery, development, and commercialization of small molecule drugs to treat patients with cancer in North America, Europe, and the Asia Pacific. Currently there are 7 analysts that rate Array BioPharma a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Array BioPharma has been 1.8 million shares per day over the past 30 days. Array BioPharma has a market cap of $873.2 million and is part of the health care sector and drugs industry. The stock has a beta of 1.99 and a short float of 25.5% with 16.69 days to cover. Shares are up 26.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Array BioPharma as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:
  • ARRY's very impressive revenue growth greatly exceeded the industry average of 22.0%. Since the same quarter one year prior, revenues leaped by 1014.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 285.00% and other important driving factors, this stock has surged by 51.49% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • Compared to other companies in the Biotechnology industry and the overall market, ARRAY BIOPHARMA INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • ARRAY BIOPHARMA INC reported significant earnings per share improvement 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, ARRAY BIOPHARMA INC reported poor results of -$0.68 versus -$0.57 in the prior year. This year, the market expects an improvement in earnings (-$0.01 versus -$0.68).
  • The debt-to-equity ratio is very high at 2.15 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 4.28, which shows the ability to cover short-term cash needs.

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