Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified

Sangamo BioSciences

(

SGMO

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

  • SGMO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.9 million.
  • SGMO has traded 64,995 shares today.
  • SGMO is down 3.2% today.
  • SGMO was up 5.6% yesterday.

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More details on SGMO:

Sangamo BioSciences, Inc., a clinical stage biopharmaceutical company, focuses on the research, development, and commercialization of zinc finger DNA-binding proteins (ZFPs) for gene regulation and gene modification in the United States. Currently there are 4 analysts that rate Sangamo BioSciences a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Sangamo BioSciences has been 829,200 shares per day over the past 30 days. Sangamo BioSciences has a market cap of $773.7 million and is part of the health care sector and drugs industry. The stock has a beta of 1.35 and a short float of 17.1% with 8.04 days to cover. Shares are down 13.8% year-to-date as of the close of trading on Wednesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Sangamo BioSciences as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and weak operating cash flow.

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 28.1% when compared to the same quarter one year ago, falling from -$5.45 million to -$6.98 million.
  • Net operating cash flow has significantly decreased to -$8.57 million or 61.98% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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 Biotechnology industry and the overall market, SANGAMO BIOSCIENCES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • SANGAMO BIOSCIENCES INC 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, SANGAMO BIOSCIENCES INC reported poor results of -$0.47 versus -$0.43 in the prior year. This year, the market expects an improvement in earnings (-$0.30 versus -$0.47).
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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