Water-Logged And Getting Wetter: Galena Biopharma (GALE)

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 Galena Biopharma ( GALE) 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 Galena Biopharma as such a stock due to the following factors:

  • GALE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $74.4 million.
  • GALE has traded 9.8 million shares today.
  • GALE traded in a range 233.6% of the normal price range with a price range of $1.56.
  • GALE traded below its daily resistance level (quality: 12 days, meaning that the stock is crossing a resistance level set by the last 12 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 GALE:

Galena Biopharma, Inc., a biopharmaceutical company, focuses on developing oncology treatments to address major unmet medical needs to advance cancer care. It is developing a pipeline of immunotherapy product candidates for the treatment of various cancers based on the E75 peptide. Currently there are 8 analysts that rate Galena Biopharma a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Galena Biopharma has been 6.4 million shares per day over the past 30 days. Galena has a market cap of $736.7 million and is part of the health care sector and drugs industry. The stock has a beta of 0.35 and a short float of 22.8% with 1.41 days to cover. Shares are up 41.1% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Galena Biopharma as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, 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 48.3% when compared to the same quarter one year ago, falling from -$6.26 million to -$9.29 million.
  • Net operating cash flow has significantly decreased to -$7.98 million or 91.66% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • GALENA BIOPHARMA INC's earnings per share declined by 22.2% 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 year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, GALENA BIOPHARMA INC reported poor results of -$0.62 versus -$0.13 in the prior year. This year, the market expects an improvement in earnings (-$0.41 versus -$0.62).
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Biotechnology industry and the overall market, GALENA BIOPHARMA INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Compared to its closing price of one year ago, GALE's share price has jumped by 320.22%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in GALE do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

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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