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

  • ARWR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.1 million.
  • ARWR has traded 90,840 shares today.
  • ARWR is trading at 2.64 times the normal volume for the stock at this time of day.
  • ARWR is trading at a new low 4.06% 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 ARWR:

Arrowhead Research Corporation, a biopharmaceutical company, develops novel drugs to treat intractable diseases in the United States. Currently there are 2 analysts that rate Arrowhead Research a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Arrowhead Research has been 1.0 million shares per day over the past 30 days. Arrowhead Research has a market cap of $212.3 million and is part of the health care sector and drugs industry. The stock has a beta of 2.37 and a short float of 19.6% with 14.06 days to cover. Shares are down 35.9% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Arrowhead Research as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally disappointing historical performance in the stock itself.

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, ARROWHEAD RESEARCH CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • ARWR's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 48.04%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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 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 14.7% when compared to the same quarter one year prior, going from -$22.58 million to -$19.26 million.
  • ARWR, with its very weak revenue results, has greatly underperformed against the industry average of 6.9%. Since the same quarter one year prior, revenues plummeted by 74.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • ARROWHEAD RESEARCH CORP has improved earnings per share by 21.9% 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, ARROWHEAD RESEARCH CORP reported poor results of -$1.61 versus -$1.23 in the prior year. This year, the market expects an improvement in earnings (-$1.45 versus -$1.61).

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