Trade-Ideas LLC identified

Omeros

(

OMER

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

  • OMER has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $92.7 million.
  • OMER has traded 118,965 shares today.
  • OMER is down 5.3% today.
  • OMER was up 72% yesterday.

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More details on OMER:

Omeros Corporation, a biopharmaceutical company, discovers, develops, and commercializes small-molecule and protein therapeutics, and orphan indications targeting inflammation, coagulopathies, and disorders of the central nervous system. Currently there are 6 analysts that rate Omeros a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Omeros has been 522,500 shares per day over the past 30 days. Omeros has a market cap of $491.0 million and is part of the health care sector and drugs industry. The stock has a beta of 2.60 and a short float of 27.8% with 2.51 days to cover. Shares are down 41.3% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Omeros as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, generally high debt management risk and weak operating cash flow.

Highlights from the ratings report include:

  • In its most recent trading session, OMER has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
  • The debt-to-equity ratio is very high at 3.88 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 2.71, which shows the ability to cover short-term cash needs.
  • Net operating cash flow has declined marginally to -$16.55 million or 8.33% when compared to the same quarter last year. Despite a decrease in cash flow of 8.33%, OMEROS CORP is in line with the industry average cash flow growth rate of -13.48%.
  • Compared to other companies in the Pharmaceuticals industry and the overall market, OMEROS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • OMEROS CORP has improved earnings per share by 17.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, OMEROS CORP reported poor results of -$2.22 versus -$1.39 in the prior year. This year, the market expects an improvement in earnings (-$1.83 versus -$2.22).

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