Trade-Ideas LLC identified

Alkermes

(

ALKS

) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Alkermes as such a stock due to the following factors:

  • ALKS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $37.1 million.
  • ALKS has traded 287,763 shares today.
  • ALKS traded in a range 210.1% of the normal price range with a price range of $3.17.
  • ALKS traded below its daily resistance level (quality: 7 days, meaning that the stock is crossing a resistance level set by the last 7 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on ALKS:

Alkermes plc, a biopharmaceutical company, researches, develops, and commercializes pharmaceutical products that are designed to address unmet medical needs of patients in various therapeutic areas worldwide. Currently there are 2 analysts that rate Alkermes a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Alkermes has been 958,000 shares per day over the past 30 days. Alkermes has a market cap of $7.7 billion and is part of the health care sector and drugs industry. The stock has a beta of 2.03 and a short float of 5.8% with 6.93 days to cover. Shares are down 34.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Alkermes as a

sell

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

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 significantly decreased by 152.5% when compared to the same quarter one year ago, falling from -$30.66 million to -$77.42 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, ALKERMES PLC'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 -$57.21 million or 2854.64% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 28.53%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 142.85% 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.
  • ALKERMES PLC 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. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ALKERMES PLC reported poor results of -$1.52 versus -$0.22 in the prior year. This year, the market expects an improvement in earnings (-$0.28 versus -$1.52).

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