Trade-Ideas LLC identified

Opko Health

(

OPK

) 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 Opko Health as such a stock due to the following factors:

  • OPK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $46.3 million.
  • OPK has traded 6.5 million shares today.
  • OPK traded in a range 237.5% of the normal price range with a price range of $1.10.
  • OPK traded below its daily resistance level (quality: 281 days, meaning that the stock is crossing a resistance level set by the last 281 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 OPK:

OPKO Health, Inc., a biopharmaceutical and diagnostics company, engages in the discovery, development, and commercialization of novel and proprietary technologies in the United States and internationally. It operates through two segments, Pharmaceuticals and Diagnostics. Currently there are 2 analysts that rate Opko Health a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Opko Health has been 5.0 million shares per day over the past 30 days. Opko Health has a market cap of $4.4 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.64 and a short float of 80.4% with 10.37 days to cover. Shares are down 1.5% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Opko Health 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 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 67.8% when compared to the same quarter one year ago, falling from -$25.48 million to -$42.77 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, OPKO HEALTH 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 -$34.06 million or 119.78% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • OPKO HEALTH INC's earnings per share declined by 50.0% in the most recent quarter compared to 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, OPKO HEALTH INC reported poor results of -$0.40 versus -$0.33 in the prior year. This year, the market expects an improvement in earnings (-$0.35 versus -$0.40).
  • Looking at where the stock is today compared to one year ago, we find that it is higher, and it has outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.

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