Acceleron Pharma (XLRN) Marked As A Dead Cat Bounce Stock

Trade-Ideas LLC identified Acceleron Pharma (XLRN) as a "dead cat bounce" (down big yesterday but up big today) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Acceleron Pharma

(

XLRN

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Acceleron Pharma as such a stock due to the following factors:

  • XLRN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.7 million.
  • XLRN has traded 58,771 shares today.
  • XLRN is up 3.1% today.
  • XLRN was down 7.1% yesterday.

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More details on XLRN:

Acceleron Pharma Inc., a clinical stage biopharmaceutical company, focuses on the discovery, development, and commercialization of protein therapeutics for cancer and rare diseases. Currently there are 7 analysts that rate Acceleron Pharma a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Acceleron Pharma has been 373,100 shares per day over the past 30 days. Acceleron has a market cap of $1.3 billion and is part of the health care sector and drugs industry. Shares are down 32.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Acceleron Pharma as a

sell

. The area that we feel has been the company's primary weakness has been its disappointing return on equity.

Highlights from the ratings report include:

  • 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, ACCELERON PHARMA INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • ACCELERON PHARMA INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ACCELERON PHARMA INC reported poor results of -$1.94 versus -$1.62 in the prior year. This year, the market expects an improvement in earnings (-$1.58 versus -$1.94).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Biotechnology industry. The net income increased by 134.7% when compared to the same quarter one year prior, rising from -$14.57 million to $5.06 million.
  • Looking at where the stock is today compared to one year ago, we find that it is higher, and it has outperformed the rise in the S&P 500 over the same period. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • XLRN has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 11.04, which clearly demonstrates the ability to cover short-term cash needs.

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