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

Vertex Pharmaceuticals

(

VRTX

) as an unusual social activity candidate. In addition to specific proprietary factors, Trade-Ideas identified Vertex Pharmaceuticals as such a stock due to the following factors:

  • VRTX has 10x the normal benchmarked social activity for this time of the day compared to its average of 2.67 mentions/day.
  • VRTX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $165.8 million.

Identifying stocks with 'Unusual Social Activity' tends to be a valuable process for traders looking to capitalize on the 'talk of the town' stocks that are basking in far more attention from the StockTwits financial community than normal. Good press? Bad press? It ultimately doesn't matter if it's good or bad if you know how to trade around the sentiment. Certain hedge funds use such data for their proprietary algorithms and it is not uncommon to see shared social sentiment play itself out in a stock's price trend.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in VRTX with the Ticky from Trade-Ideas. See the FREE profile for VRTX NOW at Trade-Ideas

More details on VRTX:

Vertex Pharmaceuticals Incorporated engages in discovering, developing, manufacturing, and commercializing small molecule drugs for patients with serious diseases. Currently there are 12 analysts that rate Vertex Pharmaceuticals a buy, no analysts rate it a sell, and 8 rate it a hold.

TheStreet Recommends

The average volume for Vertex Pharmaceuticals has been 2.6 million shares per day over the past 30 days. Vertex has a market cap of $14.4 billion and is part of the health care sector and drugs industry. The stock has a beta of -0.02 and a short float of 2% with 1.77 days to cover. Shares are up 47.2% year to date as of the close of trading on Tuesday.

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 Vertex 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 weak operating cash flow.

Highlights from the ratings report include:

  • VERTEX 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, VERTEX PHARMACEUTICALS INC swung to a loss, reporting -$0.50 versus $0.04 in the prior year. For the next year, the market is expecting a contraction of 470.0% in earnings (-$2.85 versus -$0.50).
  • 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 115.7% when compared to the same quarter one year ago, falling from -$57.54 million to -$124.13 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 Biotechnology industry and the overall market, VERTEX PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$13.72 million or 112.94% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The revenue fell significantly faster than the industry average of 10.4%. Since the same quarter one year prior, revenues fell by 34.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing 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.

null