Trade-Ideas LLC identified

Pacira Pharmaceuticals

(

PCRX

) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Pacira Pharmaceuticals as such a stock due to the following factors:

  • PCRX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $57.4 million.
  • PCRX has traded 438,625 shares today.
  • PCRX traded in a range 208.5% of the normal price range with a price range of $8.03.
  • PCRX traded above its daily resistance level (quality: 2 days, meaning that the stock is crossing a resistance level set by the last 2 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on PCRX:

Pacira Pharmaceuticals, Inc., a specialty pharmaceutical company, develops, commercializes, and manufactures proprietary pharmaceutical products primarily for use in hospitals and ambulatory surgery centers in the United States. PCRX has a PE ratio of 232. Currently there are 6 analysts that rate Pacira Pharmaceuticals a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Pacira Pharmaceuticals has been 909,400 shares per day over the past 30 days. Pacira has a market cap of $2.4 billion and is part of the health care sector and drugs industry. The stock has a beta of 2.00 and a short float of 21.4% with 8.26 days to cover. Shares are down 20.1% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Pacira Pharmaceuticals 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 impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 3.5%. Since the same quarter one year prior, revenues rose by 19.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.50, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.19, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for PACIRA PHARMACEUTICALS INC is currently very high, coming in at 80.12%. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, PCRX's net profit margin of 4.96% significantly trails the industry average.
  • Net operating cash flow has significantly decreased to $2.82 million or 68.61% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • PCRX has underperformed the S&P 500 Index, declining 23.85% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

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