The Top 10: One Million Share Club

Written by GSCR Staff   
Wednesday, 19 June 2013 07:17

In Monday’s Goldman Guide we referenced volume as a great lagging indicator for the market.  More importantly the inconsistency of volume on high buying or high selling days or a general increase or decrease in volume should provide an indication of how investors/traders feel about a certain stock.  Coincidentally, there are 10 stocks in our Market Monitor highlights that have averaged over 1 million shares traded per day over the last three months.  Here is a quick review on each of them with a percentage gain or loss listed at the far right from the date initiated.  As expected the majority of them are in bio-tech or technology.

1.    Array BioPharma, Inc. (NASDAQ – ARRY - $4.96): +19.5%

There has been some heavy selling since the stock peaked around $6.00 late last month, highlighted by 6.5 million shares traded on a down day on June 4th.  The short term technical analysis looks very bearish here.  The drop seems primarily due to an offering of $115M of convertible senior notes and nothing to do with products or pipelines. 

2.    Astex Pharmaceuticals, Inc. (NASDAQ – ASTX - $4.79): +61.8%

The stock peaked at $6.88 and has been on a steady decline in both price and volume following a downgrade by The Street.  It is probably time to take some profits.

3.    AVEO Pharmaceuticals, Inc. (NASDAQ – AVEO - $2.62): -67.9%

Probably time to get out here.  There was a massive sell-off in late April where the stock plummeted from the mid $7 range to current levels on about 10 to 15 million shares traded per day.  The company’s kidney cancer drug was not approved by the FDA and they are currently facing a lawsuit which that was filed in May.

4.    Glu Mobile, Inc. (NASDAQ – GLUU - $2.39): -13.1%

Technical analysis looks very bearish in the short term here.  The company continues to struggle to monetize from its mobile gaming products.  Probably time to cut your losses.

5.    Halozyme Therapeutics (NASDAQ – HALO - $6.41): +2.1%

The price/volume chart indicates that big up days are marked by larger volumes than big down days over the last few months.  The company has existing product in the market and promising drugs in the pipeline.  The company could turn to EPS profitability in the middle of 2014.  It is probably worth holding on to this one.

6.    LeapFrog Enterprises, Inc. (NYSE  – LEAP - $9.80): +9.4%

This stock finally climbed from the mid $8 range to current levels in the middle of May on heavy volume over 2 to 3 sessions of over 2 million shares traded per session.  The chart looks very bullish in the short term.  The company’s business model and earnings forecasts are enough to keep this one around.

7.    Meritor, Inc. (NYSE – MTOR - $7.17): +0.7%

It is too early to tell anything here, as we just featured this stock on June 18th.

8.    Novavax, Inc. (NASDAQ – NVAX - $1.93): -17.9%

      NVAX has turned into a ‘cheap’ long term play.  The three most heavily traded days over the last few months have also been days when the stock went up.  This is the good news.  The bad news is that the short, intermediate, and long term charts all look very bearish.  We missed this one as far as getting a short term pop, but think that the stock may be worth hanging onto if you have the time.

9.    Rambus, Inc. (NASDAQ – RMBS - $8.89): +64.9%

This is definitely one to keep, both from a technical and fundamental perspective.  This is an LED mobile phone components player poised to make a run.

10.  Smith and Wesson Holding Corporation (NASDAQ – SWHC - $8.89): +14.4%

No surprise here as SWHC is under heavy accumulation as broad government anti-gun laws have been passed across the country.  Volume usually averages around 1 million here, but spikes on ‘news’ days as it did early this week with an announced share buyback plan.  It is probably a good idea to hold on here.

Have a great day.

Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.

Disclaimer:

This Market Monitor blog was prepared for informational purposes only. Goldman Small Cap Research, (a division of Two Triangle Consulting Group, LLC) produces research via two formats: Goldman Select Research, which typically highlights small cap companies, and Goldman Opportunity Research, which features micro cap companies in a sponsored research format. Thus, the Select product reflects the Firm’s internally generated stock ideas while the Opportunity product reflects sponsored research reports. 

It is important to note that while we may track performance separately, we utilize the same coverage criteria in determining coverage of all stocks in both research formats. Please view the company’s individual disclosures for each engagement, which can be found in each company-specific report. All information contained in this blog, newsletter and in our reports were provided by the Companies or generated from our own due diligence. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. Analysts are compensated on a per report basis and not on the basis of his/her recommendations. 

The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, or other firms. Goldman Small Cap Research relied solely upon information provided by the Company through its filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research blog, report, note, or newsletter is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed.

This blog does not take into account the investment objectives, financial situation, or particular needs of any particular person. This blog does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with FINRA or with any state securities regulatory authority.

ALL INFORMATION IN THIS BLOG, REPORT OR NEWSLETTER IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS   INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.

For more information, visit our Disclaimer: www.goldmanresearch.com

Add comment
  • No comments found