Trade-Ideas LLC identified

Ophthotech

(

OPHT

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Ophthotech as such a stock due to the following factors:

  • OPHT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $24.1 million.
  • OPHT has traded 95,066 shares today.
  • OPHT is up 3.4% today.
  • OPHT was down 8.5% yesterday.

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More details on OPHT:

Ophthotech Corporation, a biopharmaceutical company, develops novel therapeutics to treat diseases of back of the eye. Currently there are 6 analysts that rate Ophthotech a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Ophthotech has been 587,000 shares per day over the past 30 days. Ophthotech has a market cap of $1.7 billion and is part of the health care sector and drugs industry. Shares are down 41.8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Ophthotech 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, decline in the stock price during the past year and feeble growth in its earnings per share.

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 562.7% when compared to the same quarter one year ago, falling from $8.55 million to -$39.57 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, OPHTHOTECH CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The share price of OPHTHOTECH CORP is down 8.27% when compared to where it was trading one year earlier. This reflects both (a) the trend in the overall market as well as (b) the sharp decline in the company's earnings per share. 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.
  • OPHTHOTECH CORP 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. 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, OPHTHOTECH CORP reported poor results of -$3.52 versus -$1.37 in the prior year. This year, the market expects an improvement in earnings (-$3.43 versus -$3.52).
  • OPHT, with its very weak revenue results, has greatly underperformed against the industry average of 6.9%. Since the same quarter one year prior, revenues plummeted by 91.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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