Trade-Ideas LLC identified

Anacor Pharmaceuticals

(

ANAC

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Anacor Pharmaceuticals as such a stock due to the following factors:

  • ANAC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $119.2 million.
  • ANAC has traded 529,499 shares today.
  • ANAC is down 3.4% today.
  • ANAC was up 16.4% yesterday.

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More details on ANAC:

Anacor Pharmaceuticals, Inc., a biopharmaceutical company, focuses on discovering, developing, and commercializing novel small-molecule therapeutics derived from its boron chemistry platform. It markets KERYDIN (tavaborole) topical solution for the treatment of onychomycosis of the toenails. Currently there are 3 analysts that rate Anacor Pharmaceuticals a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Anacor Pharmaceuticals has been 1.1 million shares per day over the past 30 days. Anacor has a market cap of $2.8 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.37 and a short float of 13.5% with 3.01 days to cover. Shares are down 35.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Anacor Pharmaceuticals as a

sell

. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, disappointing return on equity and generally disappointing historical performance in the stock itself.

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 86.8% when compared to the same quarter one year ago, falling from -$10.12 million to -$18.91 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, ANACOR PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The share price of ANACOR PHARMACEUTICALS INC has not done very well: it is down 7.61% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • ANACOR 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. 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, ANACOR PHARMACEUTICALS INC continued to lose money by earning -$1.40 versus -$2.07 in the prior year. This year, the market expects an improvement in earnings (-$1.25 versus -$1.40).
  • Net operating cash flow has increased to -$13.99 million or 10.20% when compared to the same quarter last year. Despite an increase in cash flow, ANACOR PHARMACEUTICALS INC's cash flow growth rate is still lower than the industry average growth rate of 26.63%.

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