Trade-Ideas LLC identified

Intercept Pharmaceuticals

(

ICPT

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

  • ICPT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $74.7 million.
  • ICPT has traded 67,356 shares today.
  • ICPT is up 3.7% today.
  • ICPT was down 9.9% yesterday.

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More details on ICPT:

Intercept Pharmaceuticals, Inc., a development stage biopharmaceutical company, focuses on the discovery, development, and commercialization of novel therapeutics to treat chronic liver and intestinal diseases utilizing its proprietary bile acid chemistry. Currently there are 5 analysts that rate Intercept Pharmaceuticals a buy, 2 analysts rate it a sell, and 3 rate it a hold.

The average volume for Intercept Pharmaceuticals has been 527,200 shares per day over the past 30 days. Intercept has a market cap of $2.7 billion and is part of the health care sector and drugs industry. The stock has a beta of -3.72 and a short float of 24% with 4.46 days to cover. Shares are down 33.5% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Intercept Pharmaceuticals as a

sell

. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, 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 significantly underperformed when compared to that of the S&P 500 and the Biotechnology industry. The net income has significantly decreased by 42.0% when compared to the same quarter one year ago, falling from -$35.84 million to -$50.90 million.
  • Net operating cash flow has decreased to -$33.62 million or 40.86% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Looking at the price performance of ICPT's shares over the past 12 months, there is not much good news to report: the stock is down 30.32%, 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.
  • INTERCEPT PHARMA INC's earnings per share declined by 24.3% 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, INTERCEPT PHARMA INC reported poor results of -$14.42 versus -$3.70 in the prior year. This year, the market expects an improvement in earnings (-$9.16 versus -$14.42).
  • 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, INTERCEPT PHARMA INC's return on equity significantly trails that of both the industry average and the S&P 500.

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