Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified

Vanda Pharmaceuticals

(

VNDA

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

  • VNDA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.2 million.
  • VNDA has traded 77,656 shares today.
  • VNDA is up 4.2% today.
  • VNDA was down 5.6% yesterday.

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More details on VNDA:

Vanda Pharmaceuticals Inc., a biopharmaceutical company, is engaged in the development and commercialization of pharmaceutical products. Currently there are 2 analysts that rate Vanda Pharmaceuticals a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Recommends

The average volume for Vanda Pharmaceuticals has been 1.4 million shares per day over the past 30 days. Vanda has a market cap of $468.0 million and is part of the health care sector and drugs industry. The stock has a beta of 2.12 and a short float of 21.6% with 4.95 days to cover. Shares are up 5.1% year-to-date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Vanda Pharmaceuticals as a

sell

. Among the areas we feel are negative, one of the most important has been unimpressive growth in net income over time.

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 decreased by 19.7% when compared to the same quarter one year ago, dropping from -$6.37 million to -$7.62 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 Biotechnology industry and the overall market, VANDA PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • VANDA PHARMACEUTICALS INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, VANDA PHARMACEUTICALS INC continued to lose money by earning -$0.66 versus -$0.98 in the prior year. For the next year, the market is expecting a contraction of 142.4% in earnings (-$1.60 versus -$0.66).
  • Compared to its closing price of one year ago, VNDA's share price has jumped by 191.56%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in VNDA do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
  • VNDA's revenue growth trails the industry average of 26.5%. Since the same quarter one year prior, revenues rose by 10.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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