XOMA (XOMA) Weak On High Volume

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

  • XOMA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.6 million.
  • XOMA has traded 592,291 shares today.
  • XOMA is trading at 3.80 times the normal volume for the stock at this time of day.
  • XOMA is trading at a new low 3.03% 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 XOMA:

XOMA Corporation discovers and develops antibody-based therapeutics in the United States, Europe, and the Asia Pacific. Currently there is 1 analyst that rates XOMA a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for XOMA has been 1.6 million shares per day over the past 30 days. XOMA has a market cap of $105.7 million and is part of the health care sector and drugs industry. The stock has a beta of 3.14 and a short float of 18.5% with 5.25 days to cover. Shares are down 27.8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates XOMA as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • Net operating cash flow has decreased to -$19.03 million or 20.42% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • XOMA'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 78.56%, 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.
  • XOMA, with its very weak revenue results, has greatly underperformed against the industry average of 6.8%. Since the same quarter one year prior, revenues plummeted by 59.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • XOMA CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, XOMA CORP continued to lose money by earning -$0.67 versus -$1.40 in the prior year. This year, the market expects an improvement in earnings (-$0.55 versus -$0.67).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Biotechnology industry. The net income increased by 96.7% when compared to the same quarter one year prior, rising from -$14.40 million to -$0.48 million.

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