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Acorda Therapeutics (ACOR) Marked As A Barbarian At The Gate

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Acorda Therapeutics ( ACOR) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Acorda Therapeutics as such a stock due to the following factors:

  • ACOR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.0 million.
  • ACOR has traded 359,914 shares today.
  • ACOR traded in a range 207.4% of the normal price range with a price range of $2.95.
  • ACOR traded above its daily resistance level (quality: 307 days, meaning that the stock is crossing a resistance level set by the last 307 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on ACOR:

Acorda Therapeutics, Inc., a commercial-stage biopharmaceutical company, engages in the identification, development, and commercialization of therapies for multiple sclerosis (MS), spinal cord injury (SCI), and other central nervous system disorders primarily in the United States. ACOR has a PE ratio of 35.9. Currently there are 3 analysts that rate Acorda Therapeutics a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Acorda Therapeutics has been 507,100 shares per day over the past 30 days. Acorda has a market cap of $1.5 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.55 and a short float of 9.3% with 5.29 days to cover. Shares are up 24.5% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Acorda Therapeutics as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 15.8%. Since the same quarter one year prior, revenues rose by 13.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • ACORDA THERAPEUTICS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, ACORDA THERAPEUTICS INC reported lower earnings of $0.39 versus $3.81 in the prior year. This year, the market expects an improvement in earnings ($0.47 versus $0.39).
  • The gross profit margin for ACORDA THERAPEUTICS INC is currently very high, coming in at 79.98%. Regardless of ACOR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ACOR's net profit margin of 6.68% is significantly lower than the industry average.
  • ACOR's share price has surged by 25.65% over the past year, reflecting the market's general trend, despite their weak earnings growth during the last quarter. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • 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 95.3% when compared to the same quarter one year ago, falling from $132.97 million to $6.19 million.

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