Trade-Ideas LLC identified

Seattle Genetics

(

SGEN

) 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 Seattle Genetics as such a stock due to the following factors:

  • SGEN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $69.1 million.
  • SGEN has traded 889,741 shares today.
  • SGEN traded in a range 234% of the normal price range with a price range of $5.75.
  • SGEN traded below its daily resistance level (quality: 29 days, meaning that the stock is crossing a resistance level set by the last 29 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 SGEN:

Seattle Genetics, Inc., a biotechnology company, develops and commercializes antibody-based therapies for the treatment of cancer. Currently there are 4 analysts that rate Seattle Genetics a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Seattle Genetics has been 1.0 million shares per day over the past 30 days. Seattle has a market cap of $5.5 billion and is part of the health care sector and drugs industry. The stock has a beta of 2.30 and a short float of 27.4% with 9.34 days to cover. Shares are up 33.8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Seattle Genetics 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:

  • SEATTLE GENETICS 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 two years. We anticipate that this should continue in the coming year. During the past fiscal year, SEATTLE GENETICS INC reported poor results of -$0.62 versus -$0.52 in the prior year. For the next year, the market is expecting a contraction of 54.8% in earnings (-$0.96 versus -$0.62).
  • 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 170.1% when compared to the same quarter one year ago, falling from -$17.59 million to -$47.50 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, SEATTLE GENETICS 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 -$46.56 million or 1013.00% 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 gross profit margin for SEATTLE GENETICS INC is currently very high, coming in at 93.56%. Regardless of SGEN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SGEN's net profit margin of -61.61% significantly underperformed when compared to the industry average.

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