Trade-Ideas LLC identified

bluebird bio

(

BLUE

) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified bluebird bio as such a stock due to the following factors:

  • BLUE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $45.0 million.
  • BLUE has traded 956,592 shares today.
  • BLUE traded in a range 220.3% of the normal price range with a price range of $5.05.
  • BLUE traded above its daily resistance level (quality: 141 days, meaning that the stock is crossing a resistance level set by the last 141 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' 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 positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on BLUE:

bluebird bio, Inc., a clinical-stage biotechnology company, focuses on developing transformative gene therapies for severe genetic and rare diseases. Currently there are 9 analysts that rate bluebird bio a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for bluebird bio has been 899,500 shares per day over the past 30 days. Bluebird bio has a market cap of $1.8 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.69 and a short float of 41.7% with 10.40 days to cover. Shares are down 21.4% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates bluebird bio 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, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • BLUEBIRD BIO 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, BLUEBIRD BIO INC reported poor results of -$4.80 versus -$1.78 in the prior year. For the next year, the market is expecting a contraction of 28.3% in earnings (-$6.16 versus -$4.80).
  • 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 127.0% when compared to the same quarter one year ago, falling from -$24.79 million to -$56.27 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, BLUEBIRD BIO 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 -$36.77 million or 52.18% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 69.57%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 100.00% 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.

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