Trade-Ideas LLC identified

Biostar Pharmaceuticals

(

BSPM

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

  • BSPM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.8 million.
  • BSPM has traded 3.0 million shares today.
  • BSPM is down 3.5% today.
  • BSPM was up 6.2% yesterday.

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More details on BSPM:

Biostar Pharmaceuticals, Inc. develops, manufactures, and markets over-the-counter (OTC) and prescription pharmaceutical products for various diseases and conditions in the People's Republic of China.

The average volume for Biostar Pharmaceuticals has been 405,900 shares per day over the past 30 days. Biostar has a market cap of $11.4 million and is part of the health care sector and drugs industry. The stock has a beta of 2.66 and a short float of 1.1% with 0.01 days to cover. Shares are up 94.8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Biostar Pharmaceuticals as a

sell

. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • BIOSTAR PHARMACEUTICALS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, BIOSTAR PHARMACEUTICALS INC swung to a loss, reporting -$11.41 versus $2.24 in the prior year.
  • 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 973.7% when compared to the same quarter one year ago, falling from $2.66 million to -$23.21 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Pharmaceuticals industry and the overall market, BIOSTAR PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 63.41%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 988.23% compared to 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.
  • BSPM, with its very weak revenue results, has greatly underperformed against the industry average of 1.0%. Since the same quarter one year prior, revenues plummeted by 87.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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