Today's Dead Cat Bounce Stock: Opko Health (OPK)
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 "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Opko Health as such a stock due to the following factors:
- OPK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $49.9 million.
- OPK has traded 729,172 shares today.
- OPK is up 3% today.
- OPK was down 6% yesterday.
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More details on OPK:
OPKO Health, Inc., a biopharmaceutical and diagnostics company, engages in the discovery, development, and commercialization of novel and proprietary technologies in the United States and internationally. It operates through two segments, Pharmaceuticals and Diagnostics. Currently there are 3 analysts that rate Opko Health a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for Opko Health has been 3.8 million shares per day over the past 30 days. Opko Health has a market cap of $6.7 billion and is part of the health care sector and health services industry. The stock has a beta of 0.50 and a short float of 20.5% with 12.58 days to cover. Shares are up 38.9% year-to-date as of the close of trading on Wednesday.
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Analysis:
rates Opko Health as a
. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share.
Highlights from the ratings report include:
- Compared to its closing price of one year ago, OPK's share price has jumped by 50.92%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- OPK's revenue growth trails the industry average of 34.7%. Since the same quarter one year prior, revenues rose by 23.4%. 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.
- Net operating cash flow has slightly increased to -$24.76 million or 4.94% when compared to the same quarter last year. Despite an increase in cash flow, OPKO HEALTH INC's cash flow growth rate is still lower than the industry average growth rate of 49.09%.
- 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 215.3% when compared to the same quarter one year ago, falling from -$16.80 million to -$52.97 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Biotechnology industry and the overall market, OPKO HEALTH INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full Opko Health Ratings Report.
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