Trade-Ideas LLC identified

Ligand Pharmaceuticals

(

LGND

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

  • LGND has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $61.8 million.
  • LGND has traded 387,184 shares today.
  • LGND is down 3% today.
  • LGND was up 5.5% yesterday.

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More details on LGND:

Ligand Pharmaceuticals Incorporated, a biopharmaceutical company, focuses on developing and acquiring technologies that help pharmaceutical companies discover and develop medicines worldwide. LGND has a PE ratio of 1. Currently there are 4 analysts that rate Ligand Pharmaceuticals a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Ligand Pharmaceuticals has been 373,500 shares per day over the past 30 days. Ligand 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 0.99 and a short float of 20.6% with 8.65 days to cover. Shares are up 24.6% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Ligand Pharmaceuticals as a

buy

. 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, notable return on equity, reasonable valuation levels and solid stock price performance. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:

  • LGND's very impressive revenue growth greatly exceeded the industry average of 19.5%. Since the same quarter one year prior, revenues leaped by 103.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.52, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 10.64, which clearly demonstrates the ability to cover short-term cash needs.
  • 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, LIGAND PHARMACEUTICAL INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.

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