One Factor Driving Transgenomic (TBIO) Stock Up - TheStreet

NEW YORK (TheStreet) -- Shares of Transgenomic (TBIO) - Get Report were spiking, sharply up 30.77% to $1.87 on heavy volume in late morning trading Tuesday, after the company launched a genetic test for the diagnosis of leukodystrophy.

The biotechnology company said it is advancing precision medicine through advanced diagnostic tests and clinical and research services for the diagnosis of leukodystrophy, a group of rare progressive genetic disorders.

Transgenomic added that as the most comprehensive test on the market, its genetic test can potentially make definitive diagnoses accessible to patients earlier in the disease process.

"Leukodystrophy comprises a group of devastating genetic diseases that have been difficult to diagnose and almost impossible to treat," Transgenomic president and CEO Paul Kinnon said in a statement.

"By enabling clinicians to pinpoint the genetic source of the disorder earlier in the disease, we hope the Leukodystrophy NGS Panel will enable better disease management and facilitate the development of more effective therapies using new technologies, such as stem cells or gene editing techniques," Kinnon added.

About 3.53 million shares have changed hands as of 11:12 a.m. ET today, compared to its average trading volume of about 529,303 shares a day.

Omaha-based Transgenomic is a global biotechnology company advancing personalized medicine for the detection and treatment of cancer and inherited diseases. 

Separately, TheStreet Ratings team rates TRANSGENOMIC INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:

"We rate TRANSGENOMIC INC (TBIO) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. 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."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 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 Life Sciences Tools & Services industry and the overall market, TRANSGENOMIC INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • TBIO'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 62.94%, 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.
  • TBIO's debt-to-equity ratio of 0.84 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. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.24 is sturdy.
  • The gross profit margin for TRANSGENOMIC INC is rather high; currently it is at 53.34%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -46.69% is in-line with the industry average.
  • Net operating cash flow has slightly increased to -$3.51 million or 9.13% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -6.98%.
  • You can view the full analysis from the report here: TBIO Ratings Report