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 Furiex Pharmaceuticals ( FURX) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Furiex Pharmaceuticals as such a stock due to the following factors:
- FURX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $67.6 million.
- FURX has traded 58,757 shares today.
- FURX is down 3.7% today.
- FURX was up 129.9% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in FURX with the Ticky from Trade-Ideas. See the FREE profile for FURX NOW at Trade-Ideas More details on FURX: Furiex Pharmaceuticals, Inc., a drug development company, engages in the compound partnering business primarily in the United States. It collaborates with pharmaceutical and biotechnology companies to enhance the value of their drug candidates by applying its novel approach to drug development. Currently there are 3 analysts that rate Furiex Pharmaceuticals a buy, no analysts rate it a sell, and none rate it a hold. The average volume for Furiex Pharmaceuticals has been 98,900 shares per day over the past 30 days. Furiex has a market cap of $478.8 million and is part of the services sector and diversified services industry. The stock has a beta of 0.81 and a short float of 10.4% with 1.13 days to cover. Shares are up 9.4% year-to-date as of the close of trading on Tuesday. 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 Furiex Pharmaceuticals as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, disappointing return on equity, weak operating cash flow and generally high debt management risk. 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 Life Sciences Tools & Services industry. The net income has significantly decreased by 164.3% when compared to the same quarter one year ago, falling from -$3.29 million to -$8.68 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 Life Sciences Tools & Services industry and the overall market, FURIEX PHARMACEUTICALS 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 -$17.07 million or 96.95% 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 debt-to-equity ratio is very high at 2.53 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, FURX has managed to keep a strong quick ratio of 1.83, which demonstrates the ability to cover short-term cash needs.
- FURX, with its decline in revenue, underperformed when compared the industry average of 12.2%. Since the same quarter one year prior, revenues slightly dropped by 0.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full Furiex Pharmaceuticals 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.