Trade-Ideas LLC identified

Regulus Therapeutics

(

RGLS

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

  • RGLS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.2 million.
  • RGLS has traded 50,626 shares today.
  • RGLS is up 3.4% today.
  • RGLS was down 6.2% yesterday.

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More details on RGLS:

Regulus Therapeutics Inc., a biopharmaceutical company, focuses on the discovery and development of drugs that target microRNAs for the treatment of various diseases in the United States. Currently there are 5 analysts that rate Regulus Therapeutics a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Regulus Therapeutics has been 721,500 shares per day over the past 30 days. Regulus has a market cap of $358.4 million and is part of the health care sector and drugs industry. The stock has a beta of 2.04 and a short float of 26.9% with 3.28 days to cover. Shares are down 26.8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Regulus Therapeutics as a

sell

. 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 ratings report include:

  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Biotechnology industry and the overall market, REGULUS THERAPEUTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • RGLS'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 59.31%, 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.
  • REGULUS THERAPEUTICS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, REGULUS THERAPEUTICS INC continued to lose money by earning -$1.09 versus -$1.32 in the prior year. For the next year, the market is expecting a contraction of 22.0% in earnings (-$1.33 versus -$1.09).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Biotechnology industry. The net income increased by 67.4% when compared to the same quarter one year prior, rising from -$22.17 million to -$7.23 million.
  • RGLS's very impressive revenue growth greatly exceeded the industry average of 6.7%. Since the same quarter one year prior, revenues leaped by 157.4%. Growth in the company's revenue appears to have helped boost the earnings per share.

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