Ironwood Pharmaceuticals (IRWD): Today's Weak On High Volume Stock

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

  • IRWD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $17.1 million.
  • IRWD has traded 143,370 shares today.
  • IRWD is trading at 4.34 times the normal volume for the stock at this time of day.
  • IRWD is trading at a new low 3.04% 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 IRWD:

Ironwood Pharmaceuticals, Inc., a pharmaceutical company, engages in the research, development, and commercialization of human therapeutic products. Currently there are 4 analysts that rate Ironwood Pharmaceuticals a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Ironwood Pharmaceuticals has been 1.3 million shares per day over the past 30 days. Ironwood has a market cap of $2.1 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.66 and a short float of 18.5% with 11.12 days to cover. Shares are up 21.9% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Ironwood Pharmaceuticals as a sell. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and generally high debt management risk.

Highlights from the ratings report include:
  • The gross profit margin for IRONWOOD PHARMACEUTICALS INC is currently extremely low, coming in at 1.40%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, IRWD's net profit margin of -20.13% significantly underperformed when compared to the industry average.
  • The debt-to-equity ratio is very high at 4.17 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 6.25, which shows the ability to cover short-term cash needs.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Biotechnology industry and the overall market, IRONWOOD PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 100.44% to $0.16 million when compared to the same quarter last year. In addition, IRONWOOD PHARMACEUTICALS INC has also vastly surpassed the industry average cash flow growth rate of -36.07%.
  • This stock has increased by 36.18% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in IRWD do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

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