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 Geron Corporation ( GERN) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Geron Corporation as such a stock due to the following factors:
- GERN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $24.7 million.
- GERN has traded 7.8 million shares today.
- GERN traded in a range 211.2% of the normal price range with a price range of $0.68.
- GERN traded above its daily resistance level (quality: 41 days, meaning that the stock is crossing a resistance level set by the last 41 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' 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 positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher. EXCLUSIVE OFFER: Get the inside scoop on opportunities in GERN with the Ticky from Trade-Ideas. See the FREE profile for GERN NOW at Trade-Ideas More details on GERN: Geron Corporation is a clinical stage biopharmaceutical company developing a first-in-class telomerase inhibitor, imetelstat, in hematologic myeloid malignancies. The company was founded in 1990 and is based in Menlo Park, California. Currently there are 2 analysts that rate Geron Corporation a buy, no analysts rate it a sell, and 2 rate it a hold. The average volume for Geron Corporation has been 5.8 million shares per day over the past 30 days. Geron has a market cap of $581.0 million and is part of the health care sector and drugs industry. The stock has a beta of 2.35 and a short float of 7.4% with 2.06 days to cover. Shares are down 5% 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 Geron Corporation as a sell. The area that we feel has been the company's primary weakness has been its declining revenues. Highlights from the ratings report include:
- 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, GERON CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- GERN, with its very weak revenue results, has greatly underperformed against the industry average of 10.6%. Since the same quarter one year prior, revenues plummeted by 71.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- GERN 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 9.88, which clearly demonstrates the ability to cover short-term cash needs.
- This stock has increased by 159.75% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in GERN do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- GERON CORP 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. This trend suggests that the performance of the business is improving. During the past fiscal year, GERON CORP continued to lose money by earning -$0.54 versus -$0.78 in the prior year. This year, the market expects an improvement in earnings (-$0.29 versus -$0.54).
- You can view the full Geron Corporation 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.