Today's Dead Cat Bounce Stock Is NewLink Genetics (NLNK) - TheStreet

Trade-Ideas LLC identified

NewLink Genetics

(

NLNK

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

  • NLNK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.5 million.
  • NLNK has traded 63,467 shares today.
  • NLNK is up 3.4% today.
  • NLNK was down 5.5% yesterday.

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More details on NLNK:

NewLink Genetics Corporation, a biopharmaceutical company, focuses on discovering, developing, and commercializing immunotherapeutic products to enhance treatment options for patients with cancer. NLNK has a PE ratio of 1. Currently there are 2 analysts that rate NewLink Genetics a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for NewLink Genetics has been 506,100 shares per day over the past 30 days. NewLink has a market cap of $1.1 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.34 and a short float of 21.8% with 12.04 days to cover. Shares are down 6% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates NewLink Genetics as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • NLNK's very impressive revenue growth greatly exceeded the industry average of 10.3%. Since the same quarter one year prior, revenues leaped by 3411.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • NLNK's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 24.69, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has slightly increased to -$6.39 million or 9.18% when compared to the same quarter last year. Despite an increase in cash flow, NEWLINK GENETICS CORP's average is still marginally south of the industry average growth rate of 17.19%.
  • The share price of NEWLINK GENETICS CORP has not done very well: it is down 10.15% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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 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 53.8% when compared to the same quarter one year ago, falling from -$9.16 million to -$14.09 million.

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