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

  • RDY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.5 million.
  • RDY has traded 152,659 shares today.
  • RDY is trading at 10.63 times the normal volume for the stock at this time of day.
  • RDY is trading at a new low 9.02% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in RDY with the Ticky from Trade-Ideas. See the FREE profile for RDY NOW at Trade-Ideas

More details on RDY:

Dr. Reddy's Laboratories Limited operates as an integrated pharmaceutical company worldwide. It operates through three segments: Global Generics, Pharmaceutical Services and Active Ingredients (PSAI), and Proprietary Products. The stock currently has a dividend yield of 0.5%. RDY has a PE ratio of 3. Currently there is 1 analyst that rates Dr Reddy's Laboratories a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Dr Reddy's Laboratories has been 347,000 shares per day over the past 30 days. Dr Reddy's has a market cap of $9.1 billion and is part of the health care sector and drugs industry. Shares are up 12.6% year-to-date as of the close of trading on Monday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Dr Reddy's Laboratories as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • RDY's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.40, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for DR REDDY'S LABORATORIES LTD is rather high; currently it is at 60.95%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, RDY's net profit margin of 1.94% significantly trails the industry average.
  • Net operating cash flow has decreased to $139.28 million or 16.81% when compared to the same quarter last year. Despite a decrease in cash flow DR REDDY'S LABORATORIES LTD is still fairing well by exceeding its industry average cash flow growth rate of -54.52%.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Pharmaceuticals industry. The net income has significantly decreased by 87.3% when compared to the same quarter one year ago, falling from $86.44 million to $11.00 million.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.