Idera Pharmaceuticals (IDRA) Showing Signs Of Perilous Reversal Today

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 Idera Pharmaceuticals ( IDRA) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Idera Pharmaceuticals as such a stock due to the following factors:

  • IDRA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $16.9 million.
  • IDRA has traded 654,600 shares today.
  • IDRA is down 3.2% today.
  • IDRA was up 15.4% yesterday.

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More details on IDRA:

Idera Pharmaceuticals, Inc., a clinical stage biotechnology company, engages in the discovery and development of novel synthetic DNA- and RNA- based drug candidates. Currently there is 1 analyst that rates Idera Pharmaceuticals a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Idera Pharmaceuticals has been 2.5 million shares per day over the past 30 days. Idera has a market cap of $385.4 million and is part of the health care sector and drugs industry. The stock has a beta of 3.11 and a short float of 1.7% with 0.23 days to cover. Shares are up 12.3% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Idera Pharmaceuticals as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.

Highlights from the ratings report include:
  • IDRA's very impressive revenue growth greatly exceeded the industry average of 15.7%. Since the same quarter one year prior, revenues leaped by 133.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • IDRA 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 15.89, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has remained constant at -$4.67 million with no significant change when compared to the same quarter last year. Despite stable cash flow, IDERA PHARMACEUTICALS INC's cash flow growth rate is still lower than the industry average growth rate of 42.25%.
  • 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, IDERA PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Biotechnology industry average. The net income has decreased by 1.5% when compared to the same quarter one year ago, dropping from -$4.67 million to -$4.74 million.

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