Today's Weak On High Volume Stock: PDL BioPharma (PDLI)

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

  • PDLI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.8 million.
  • PDLI has traded 815,671 shares today.
  • PDLI is trading at 14.71 times the normal volume for the stock at this time of day.
  • PDLI is trading at a new low 17.23% 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 PDLI:

PDL BioPharma, Inc. manages a portfolio of patents and royalty assets in the United States and Europe. The company is involved in the humanization of monoclonal antibodies and the discovery of a new generation of targeted treatments for cancer and immunologic diseases. It offers Queen et al. The stock currently has a dividend yield of 5.6%. PDLI has a PE ratio of 2. Currently there are no analysts that rate PDL BioPharma a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for PDL BioPharma has been 1.3 million shares per day over the past 30 days. PDL BioPharma has a market cap of $587.8 million and is part of the health care sector and drugs industry. The stock has a beta of 0.77 and a short float of 7.7% with 11.70 days to cover. Shares are down 0.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates PDL BioPharma 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, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.31, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 13.01, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for PDL BIOPHARMA INC is currently very high, coming in at 91.88%. Regardless of PDLI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PDLI's net profit margin of 46.08% significantly outperformed against the industry.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 39.46%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 32.00% compared to the year-earlier 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 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 Biotechnology industry. The net income has significantly decreased by 33.9% when compared to the same quarter one year ago, falling from $84.50 million to $55.89 million.

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