Trade-Ideas LLC identified

Horizon Pharma

(

HZNP

) 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 $83.4 million.
  • HZNP has traded 61,103 shares today.
  • HZNP is up 4.9% today.
  • HZNP was down 7.5% 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 116. 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 4.7 million shares per day over the past 30 days. Horizon has a market cap of $2.8 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.45 and a short float of 12.8% with 2.99 days to cover. Shares are down 24.9% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Horizon Pharma as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and unimpressive growth in net income.

Highlights from the ratings report include:

  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 49.12%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 75.00% compared to the year-earlier 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.
  • 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 Pharmaceuticals industry. The net income has significantly decreased by 132.2% when compared to the same quarter one year ago, falling from -$19.55 million to -$45.41 million.
  • 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 Pharmaceuticals industry and the overall market, HORIZON PHARMA PLC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for HORIZON PHARMA PLC is currently very high, coming in at 90.18%. Regardless of HZNP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HZNP's net profit margin of -22.18% significantly underperformed when compared to the industry average.
  • HZNP's debt-to-equity ratio of 0.88 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. Despite the fact that HZNP's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.53 is high and demonstrates strong liquidity.

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