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NEW YORK (

TheStreet

)

-- Acura Pharmaceuticals

(Nasdaq:

ACUR

) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally disappointing historical performance in the stock itself.

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Highlights from the ratings report include:

  • 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 Pharmaceuticals industry and the overall market, ACURA PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • ACUR'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 53.10%, 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 net income growth from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Pharmaceuticals industry. The net income increased by 3.1% when compared to the same quarter one year prior, going from -$4.22 million to -$4.09 million.
  • ACURA PHARMACEUTICALS INC has improved earnings per share by 11.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ACURA PHARMACEUTICALS INC reported poor results of -$0.30 versus -$0.20 in the prior year. This year, the market expects an improvement in earnings (-$0.16 versus -$0.30).
  • Net operating cash flow has increased to -$2.98 million or 10.32% when compared to the same quarter last year. Despite an increase in cash flow, ACURA PHARMACEUTICALS INC's average is still marginally south of the industry average growth rate of 10.71%.

Acura Pharmaceuticals, Inc., a specialty pharmaceutical company, researches, develops, and commercializes products to address medication abuse and misuse utilizing its proprietary Aversion and Impede technologies. Acura has a market cap of $51.8 million and is part of the health care sector and drugs industry. Shares are down 36.5% year to date as of the close of trading on Tuesday.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.