Trade-Ideas: Cepheid (CPHD) Is Today's "Dead Cat Bounce" Stock
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 Cepheid as such a stock due to the following factors:
- CPHD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $27.7 million.
- CPHD has traded 110,354 shares today.
- CPHD is up 3.3% today.
- CPHD was down 5% yesterday.
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More details on CPHD:
Cepheid, a molecular diagnostics company, develops, manufactures, and markets integrated systems for testing in the clinical market and non-clinical markets. Its systems enable molecular testing for organisms and genetic-based diseases by automating manual laboratory procedures. Currently there are 11 analysts that rate Cepheid a buy, no analysts rate it a sell, and 5 rate it a hold.
The average volume for Cepheid has been 1.2 million shares per day over the past 30 days. Cepheid has a market cap of $2.6 billion and is part of the technology sector and electronics industry. The stock has a beta of -0.04 and a short float of 12.4% with 6.98 days to cover. Shares are down 37.5% year-to-date as of the close of trading on Wednesday.
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Analysis:
rates Cepheid as a
. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- CEPHEID 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, CEPHEID INC reported poor results of -$0.71 versus -$0.27 in the prior year. For the next year, the market is expecting a contraction of 1.4% in earnings (-$0.72 versus -$0.71).
- 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 216.5% when compared to the same quarter one year ago, falling from -$7.24 million to -$22.90 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, CEPHEID INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $11.57 million or 13.61% when compared to the same quarter last year. Despite a decrease in cash flow CEPHEID INC is still fairing well by exceeding its industry average cash flow growth rate of -46.79%.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 31.64%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 220.00% compared to the year-earlier 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.
- You can view the full Cepheid Ratings Report.
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