Horizon Pharma (HZNP) Highlighted As Today's Perilous Reversal Stock - TheStreet

Trade-Ideas LLC identified

Horizon Pharma

(

HZNP

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

  • HZNP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $196.5 million.
  • HZNP has traded 1.0 million shares today.
  • HZNP is down 3.3% today.
  • HZNP was up 6.6% yesterday.

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More details on HZNP:

Horizon Pharma plc, a specialty biopharmaceutical company, engages in identifying, developing, acquiring or in-licensing, and commercializing medicines for the treatment of arthritis, pain, inflammatory, and/or orphan diseases in the United States and internationally. HZNP has a PE ratio of 169. Currently there are 7 analysts that rate Horizon Pharma a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Horizon Pharma has been 7.1 million shares per day over the past 30 days. Horizon has a market cap of $3.2 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.23 and a short float of 15.5% with 2.24 days to cover. Shares are up 67.7% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Horizon Pharma as a

sell

. The area that we feel has been the company's primary weakness has been its feeble growth in its earnings per share.

Highlights from the ratings report include:

  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Pharmaceuticals industry and the overall market, HORIZON PHARMA PLC's return on equity significantly trails that of both the industry average and the S&P 500.
  • HORIZON PHARMA PLC reported flat earnings per share in the most recent quarter. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, HORIZON PHARMA PLC reported poor results of -$3.70 versus -$2.29 in the prior year. This year, the market expects an improvement in earnings ($1.81 versus -$3.70).
  • HZNP's debt-to-equity ratio of 0.91 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 2.82 is very high and demonstrates very strong liquidity.
  • The gross profit margin for HORIZON PHARMA PLC is currently very high, coming in at 93.90%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, HZNP's net profit margin of 1.44% significantly trails the industry average.
  • Net operating cash flow has significantly increased by 5928.85% to $88.38 million when compared to the same quarter last year. In addition, HORIZON PHARMA PLC has also vastly surpassed the industry average cash flow growth rate of -0.80%.

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