Today's Unusual Social Activity Stock: Vertex Pharmaceuticals (VRTX)
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 or Stephanie Link.
Trade-Ideas LLC identified
(
) as an unusual social activity candidate. In addition to specific proprietary factors, Trade-Ideas identified Vertex Pharmaceuticals as such a stock due to the following factors:
- VRTX has more that 20x the normal benchmarked social activity for this time of the day compared to its average of 17.94 mentions/day.
- VRTX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $178.6 million.
Identifying stocks with 'Unusual Social Activity' tends to be a valuable process for traders looking to capitalize on the 'talk of the town' stocks that are basking in far more attention from the StockTwits financial community than normal. Good press? Bad press? It ultimately doesn't matter if it's good or bad if you know how to trade around the sentiment. Certain hedge funds use such data for their proprietary algorithms and it is not uncommon to see shared social sentiment play itself out in a stock's price trend.
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More details on VRTX:
Vertex Pharmaceuticals Incorporated engages in discovering, developing, manufacturing, and commercializing small molecule drugs for patients with serious diseases in specialty markets. Currently there are 9 analysts that rate Vertex Pharmaceuticals a buy, no analysts rate it a sell, and 10 rate it a hold.
The average volume for Vertex Pharmaceuticals has been 1.6 million shares per day over the past 30 days. Vertex has a market cap of $29.9 billion and is part of the health care sector and drugs industry. The stock has a beta of -0.70 and a short float of 1.5% with 2.18 days to cover. Shares are up 1.1% year-to-date as of the close of trading on Wednesday.
Analysis:
rates Vertex Pharmaceuticals as a
. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow and feeble growth in its earnings per share.
Highlights from the ratings report include:
- 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 498.9% when compared to the same quarter one year ago, falling from $44.29 million to -$176.66 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Biotechnology industry and the overall market, VERTEX PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$121.87 million or 522.35% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- VERTEX PHARMACEUTICALS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, VERTEX PHARMACEUTICALS INC reported poor results of -$3.14 versus -$2.29 in the prior year. This year, the market expects an improvement in earnings (-$1.24 versus -$3.14).
- VRTX, with its very weak revenue results, has greatly underperformed against the industry average of 36.4%. Since the same quarter one year prior, revenues plummeted by 58.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full Vertex Pharmaceuticals Ratings Report.
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