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Trade-Ideas LLC identified

Alkermes

(

ALKS

) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Alkermes as such a stock due to the following factors:

  • ALKS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $57.6 million.
  • ALKS has traded 650,283 shares today.
  • ALKS traded in a range 225.5% of the normal price range with a price range of $5.86.
  • ALKS traded below its daily resistance level (quality: 19 days, meaning that the stock is crossing a resistance level set by the last 19 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on ALKS:

TheStreet Recommends

Alkermes Public Limited Company, an integrated biopharmaceutical company, engages in the research, development, and commercialization of pharmaceutical products to address unmet medical needs of patients in various therapeutic areas. Currently there are 6 analysts that rate Alkermes a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Alkermes has been 877,300 shares per day over the past 30 days. Alkermes has a market cap of $11.8 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.57 and a short float of 4.4% with 4.98 days to cover. Shares are up 34.4% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Alkermes as a

sell

. 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 and weak operating cash flow.

Highlights from the ratings report include:

  • ALKERMES PLC 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 year. We anticipate that this should continue in the coming year. During the past fiscal year, ALKERMES PLC swung to a loss, reporting -$0.22 versus $0.13 in the prior year. For the next year, the market is expecting a contraction of 77.3% in earnings (-$0.39 versus -$0.22).
  • 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 102.8% when compared to the same quarter one year ago, falling from -$39.96 million to -$81.02 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, ALKERMES PLC'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 -$29.45 million or 277.07% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • ALKS, with its decline in revenue, underperformed when compared the industry average of 13.4%. Since the same quarter one year prior, revenues slightly dropped by 4.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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