Solazyme (SZYM) Highlighted As Weak On High Volume

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

  • SZYM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.4 million.
  • SZYM has traded 526,358 shares today.
  • SZYM is trading at 3.72 times the normal volume for the stock at this time of day.
  • SZYM is trading at a new low 7.14% 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 SZYM:

Solazyme, Inc. creates and sells food, nutrition, and specialty ingredients from algae. Its platform uses microalgae to produce high-value triglyceride oils, proteins, fibers, micronutrients, and other ingredients. Currently there is 1 analyst that rates Solazyme a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Solazyme has been 784,600 shares per day over the past 30 days. Solazyme has a market cap of $172.1 million and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.01 and a short float of 26.9% with 7.10 days to cover. Shares are down 14.9% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Solazyme as a sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • SZYM'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 27.97%, 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.
  • SZYM, with its decline in revenue, underperformed when compared the industry average of 10.8%. Since the same quarter one year prior, revenues fell by 28.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for SOLAZYME INC is rather high; currently it is at 55.93%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -334.00% is in-line with the industry average.
  • SOLAZYME INC has improved earnings per share by 24.6% 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, SOLAZYME INC continued to lose money by earning -$1.76 versus -$2.13 in the prior year. This year, the market expects an improvement in earnings (-$1.19 versus -$1.76).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Chemicals industry average. The net income increased by 22.7% when compared to the same quarter one year prior, going from -$44.87 million to -$34.69 million.

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