Trade-Ideas: Questcor Pharmaceuticals (QCOR) Is Today's

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 Questcor Pharmaceuticals ( QCOR) 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 Questcor Pharmaceuticals as such a stock due to the following factors:

  • QCOR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $126.0 million.
  • QCOR has traded 1.1 million shares today.
  • QCOR traded in a range 241.5% of the normal price range with a price range of $8.11.
  • QCOR traded below its daily resistance level (quality: 18 days, meaning that the stock is crossing a resistance level set by the last 18 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 QCOR:

Questcor Pharmaceuticals, Inc., a biopharmaceutical company, provides drugs for the treatment of multiple sclerosis, nephrotic syndrome, and infantile spasms indications. It primarily offers H.P. The stock currently has a dividend yield of 1.8%. QCOR has a PE ratio of 15.2. Currently there are 6 analysts that rate Questcor Pharmaceuticals a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Questcor Pharmaceuticals has been 1.8 million shares per day over the past 30 days. Questcor has a market cap of $3.4 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.99 and a short float of 28.6% with 6.03 days to cover. Shares are up 109.9% year to date as of the close of trading on Friday.

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 Questcor Pharmaceuticals as a buy. 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, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • QCOR's very impressive revenue growth greatly exceeded the industry average of 2.6%. Since the same quarter one year prior, revenues leaped by 64.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • QCOR's debt-to-equity ratio is very low at 0.06 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.44, which illustrates the ability to avoid short-term cash problems.
  • Powered by its strong earnings growth of 72.30% and other important driving factors, this stock has surged by 164.48% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • QUESTCOR PHARMACEUTICALS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, QUESTCOR PHARMACEUTICALS INC increased its bottom line by earning $3.17 versus $1.21 in the prior year. This year, the market expects an improvement in earnings ($4.91 versus $3.17).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Pharmaceuticals industry. The net income increased by 66.5% when compared to the same quarter one year prior, rising from $41.51 million to $69.12 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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