Perilous Reversal Watch: Keryx Biopharmaceuticals (KERX) - TheStreet

Trade-Ideas LLC identified

Keryx Biopharmaceuticals

(

KERX

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

  • KERX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $16.0 million.
  • KERX has traded 329,855 shares today.
  • KERX is down 3.1% today.
  • KERX was up 12.8% yesterday.

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More details on KERX:

Keryx Biopharmaceuticals, Inc., a biopharmaceutical company, focuses on providing therapies for patients with renal disease in the United States. Currently there are 6 analysts that rate Keryx Biopharmaceuticals a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Keryx Biopharmaceuticals has been 2.5 million shares per day over the past 30 days. Keryx has a market cap of $422.8 million and is part of the health care sector and drugs industry. The stock has a beta of 6.44 and a short float of 36.2% with 8.25 days to cover. Shares are down 68.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Keryx Biopharmaceuticals as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself 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 underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Biotechnology industry average. The net income has decreased by 19.9% when compared to the same quarter one year ago, dropping from -$22.41 million to -$26.88 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, KERYX BIOPHARMACEUTICALS 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 -$38.77 million or 120.64% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Looking at the price performance of KERX's shares over the past 12 months, there is not much good news to report: the stock is down 70.84%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than 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.
  • KERYX BIOPHARMACEUTICALS INC's earnings per share declined by 8.3% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, KERYX BIOPHARMACEUTICALS INC reported poor results of -$1.21 versus -$0.57 in the prior year. This year, the market expects an improvement in earnings (-$1.04 versus -$1.21).

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