NEW YORK (TheStreet) -- Arena Pharmaceuticals (ARNA - Get Report) shares are plummeting, down -8.1% to $5.37, on Monday after CEO Jack Lief sold 223,525 shares of the company at an average price $5.85 for a total transaction of $1,307,621.25, according to an SEC filing on Thursday.
TheStreet has in-depth coverage of the sale here.
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TheStreet Ratings team rates ARENA PHARMACEUTICALS INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate ARENA PHARMACEUTICALS INC (ARNA) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 33.8% when compared to the same quarter one year ago, falling from -$18.88 million to -$25.26 million.
- Net operating cash flow has declined marginally to -$19.12 million or 4.89% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- The share price of ARENA PHARMACEUTICALS INC has not done very well: it is down 21.33% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- ARENA PHARMACEUTICALS INC's earnings per share declined by 33.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ARENA PHARMACEUTICALS INC continued to lose money by earning -$0.10 versus -$0.47 in the prior year. For the next year, the market is expecting a contraction of 345.0% in earnings (-$0.45 versus -$0.10).
- 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, ARENA PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: ARNA Ratings Report