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 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 $32.3 million.
- SGEN has traded 412,849 shares today.
- SGEN traded in a range 219.6% of the normal price range with a price range of $2.69.
- SGEN traded below its daily resistance level (quality: 5 days, meaning that the stock is crossing a resistance level set by the last 5 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. EXCLUSIVE OFFER: Get the inside scoop on opportunities in SGEN with the Ticky from Trade-Ideas. See the FREE profile for SGEN NOW at Trade-Ideas More details on SGEN: Seattle Genetics, Inc., a biotechnology company, focuses on the development and commercialization of monoclonal antibody-based therapies for cancer. Its product candidate, ADCETRIS, has accelerated approval form the U.S. Currently there are 3 analysts that rate Seattle Genetics a buy, 2 analysts rate it a sell, and 5 rate it a hold. The average volume for Seattle Genetics has been 838,000 shares per day over the past 30 days. Seattle has a market cap of $5.4 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.12 and a short float of 17.1% with 19.93 days to cover. Shares are up 91.4% 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 Seattle Genetics as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income 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 73.5% when compared to the same quarter one year ago, falling from -$13.65 million to -$23.69 million.
- 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, SEATTLE GENETICS INC continued to lose money by earning -$0.47 versus -$1.34 in the prior year. For the next year, the market is expecting a contraction of 33.0% in earnings (-$0.63 versus -$0.47).
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. 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 increased by 220.57% to $29.82 million when compared to the same quarter last year. In addition, SEATTLE GENETICS INC has also vastly surpassed the industry average cash flow growth rate of 1.39%.
- SGEN has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.05, which clearly demonstrates the ability to cover short-term cash needs.
- You can view the full Seattle Genetics Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.