Today's Dead Cat Bounce Stock: Horizon Pharma (HZNP)
Trade-Ideas LLC identified
(
) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Horizon Pharma as such a stock due to the following factors:
- HZNP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $56.3 million.
- HZNP has traded 220,402 shares today.
- HZNP is up 9.2% today.
- HZNP was down 8.1% yesterday.
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More details on HZNP:
Horizon Pharma plc, a biopharmaceutical company, engages in identifying, developing, acquiring, and commercializing medicines for the treatment of arthritis, pain, inflammatory, and/or orphan diseases in the United States and internationally. HZNP has a PE ratio of 59. Currently there are 6 analysts that rate Horizon Pharma a buy, 1 analyst rates it a sell, and none rate it a hold.
The average volume for Horizon Pharma has been 5.0 million shares per day over the past 30 days. Horizon has a market cap of $2.4 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.40 and a short float of 12.8% with 4.50 days to cover. Shares are down 32.7% year-to-date as of the close of trading on Thursday.
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Analysis:
rates Horizon Pharma as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.
Highlights from the ratings report include:
- HZNP's very impressive revenue growth greatly exceeded the industry average of 5.8%. Since the same quarter one year prior, revenues leaped by 135.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- HORIZON PHARMA PLC 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 two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, HORIZON PHARMA PLC turned its bottom line around by earning $0.21 versus -$3.70 in the prior year. This year, the market expects an improvement in earnings ($2.32 versus $0.21).
- HZNP's debt-to-equity ratio of 0.87 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.00 is very high and demonstrates very strong liquidity.
- 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. In comparison to the other companies in the Pharmaceuticals industry and the overall market, HORIZON PHARMA PLC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- HZNP'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 49.38%, 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. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- You can view the full Horizon Pharma Ratings Report.
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