Prothena (PRTA) Is Today's Perilous Reversal Stock
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.
Trade-Ideas LLC identified
(
) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Prothena as such a stock due to the following factors:
- PRTA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $34.0 million.
- PRTA has traded 59,413 shares today.
- PRTA is down 3% today.
- PRTA was up 32.3% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in PRTA with the Ticky from Trade-Ideas. See the FREE profile for PRTA NOW at Trade-Ideas
More details on PRTA:
Prothena Corporation plc, a clinical stage biotechnology company, focuses on the discovery, development, and commercialization of novel antibodies for the treatment of various diseases associated with protein misfolding or cell adhesion. Currently there are 4 analysts that rate Prothena a buy, 1 analyst rates it a sell, and none rate it a hold.
The average volume for Prothena has been 219,800 shares per day over the past 30 days. Prothena has a market cap of $780.3 million and is part of the health care sector and drugs industry. The stock has a beta of 1.19 and a short float of 13.2% with 2.46 days to cover. Shares are up 40.8% year-to-date as of the close of trading on Thursday.
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.
Analysis:
rates Prothena as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- PRTA's very impressive revenue growth greatly exceeded the industry average of 34.7%. Since the same quarter one year prior, revenues leaped by 1105.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- PRTA 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.
- PROTHENA CORP PLC has improved earnings per share by 7.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, PROTHENA CORP PLC continued to lose money by earning -$0.12 versus -$2.22 in the prior year. For the next year, the market is expecting a contraction of 2258.3% in earnings (-$2.83 versus -$0.12).
- PRTA's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 38.33%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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 decreased by 18.6% when compared to the same quarter one year ago, dropping from -$11.05 million to -$13.11 million.
- You can view the full Prothena Ratings Report.
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.
null