Stock To Watch: Lexicon Pharmaceuticals (LXRX) In Perilous Reversal

Trade-Ideas LLC identified Lexicon Pharmaceuticals (LXRX) as a "perilous reversal" (up big yesterday but down big today) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Lexicon Pharmaceuticals

(

LXRX

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Lexicon Pharmaceuticals as such a stock due to the following factors:

  • LXRX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $22.2 million.
  • LXRX has traded 76,445 shares today.
  • LXRX is down 4.6% today.
  • LXRX was up 5.5% yesterday.

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More details on LXRX:

Lexicon Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the discovery and development of pharmaceutical products for the treatment of human diseases. Currently there are 2 analysts that rate Lexicon Pharmaceuticals a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for Lexicon Pharmaceuticals has been 1.1 million shares per day over the past 30 days. Lexicon has a market cap of $1.4 billion and is part of the health care sector and drugs industry. The stock has a beta of -0.91 and a short float of 45% with 6.96 days to cover. Shares are up 116% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Lexicon Pharmaceuticals 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, LEXICON PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • This stock has increased by 25.86% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in LXRX do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
  • LEXICON PHARMACEUTICALS INC has improved earnings per share by 39.3% 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. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, LEXICON PHARMACEUTICALS INC continued to lose money by earning -$1.33 versus -$1.40 in the prior year. This year, the market expects an improvement in earnings (-$1.30 versus -$1.33).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Biotechnology industry average. The net income increased by 12.9% when compared to the same quarter one year prior, going from -$40.50 million to -$35.28 million.
  • The revenue growth came in higher than the industry average of 11.6%. Since the same quarter one year prior, revenues rose by 35.1%. Growth in the company's revenue appears to have helped boost the earnings per share.

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