Trade-Ideas: Cytokinetics (CYTK) 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 Cytokinetics ( CYTK) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Cytokinetics as such a stock due to the following factors:

  • CYTK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.4 million.
  • CYTK has traded 82,913 shares today.
  • CYTK is up 3.8% today.
  • CYTK was down 5.7% yesterday.

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More details on CYTK:

Cytokinetics, Incorporated, a clinical-stage biopharmaceutical company, focuses on the discovery and development of small molecule therapeutics that modulate muscle function for the potential treatment of serious diseases and medical conditions. Currently there are 4 analysts that rate Cytokinetics a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Cytokinetics has been 568,100 shares per day over the past 30 days. Cytokinetics has a market cap of $290.7 million and is part of the health care sector and drugs industry. The stock has a beta of 0.66 and a short float of 10.5% with 1.94 days to cover. Shares are up 42.9% year-to-date as of the close of trading on Thursday.

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 Cytokinetics as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Biotechnology industry and the overall market, CYTOKINETICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CYTOKINETICS INC is currently lower than what is desirable, coming in at 26.42%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, CYTK's net profit margin of 26.82% compares favorably to the industry average.
  • CYTOKINETICS 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, CYTOKINETICS INC continued to lose money by earning -$1.34 versus -$2.46 in the prior year. For the next year, the market is expecting a contraction of 3.7% in earnings (-$1.39 versus -$1.34).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Biotechnology industry. The net income increased by 157.0% when compared to the same quarter one year prior, rising from -$11.46 million to $6.53 million.
  • This stock has increased by 46.15% 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 CYTK 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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