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 ACADIA Pharmaceuticals ( ACAD) 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 ACADIA Pharmaceuticals as such a stock due to the following factors:
- ACAD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $63.4 million.
- ACAD has traded 1.9 million shares today.
- ACAD traded in a range 224.7% of the normal price range with a price range of $3.60.
- ACAD traded below its daily resistance level (quality: 2 days, meaning that the stock is crossing a resistance level set by the last 2 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. EXCLUSIVE OFFER: Get the inside scoop on opportunities in ACAD with the Ticky from Trade-Ideas. See the FREE profile for ACAD NOW at Trade-Ideas More details on ACAD: ACADIA Pharmaceuticals Inc., a biopharmaceutical company, focuses on innovative treatments that address unmet medical needs in neurological and related central nervous system disorders. Currently there are 7 analysts that rate ACADIA Pharmaceuticals a buy, no analysts rate it a sell, and none rate it a hold. The average volume for ACADIA Pharmaceuticals has been 1.5 million shares per day over the past 30 days. ACADIA has a market cap of $2.7 billion and is part of the health care sector and drugs industry. The stock has a beta of 3.03 and a short float of 18.5% with 4.39 days to cover. Shares are up 20.4% 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 ACADIA Pharmaceuticals 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 345.3% when compared to the same quarter one year ago, falling from -$2.40 million to -$10.70 million.
- Net operating cash flow has significantly decreased to -$9.48 million or 78.57% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- ACADIA PHARMACEUTICALS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ACADIA PHARMACEUTICALS INC continued to lose money by earning -$0.37 versus -$0.44 in the prior year. For the next year, the market is expecting a contraction of 20.3% in earnings (-$0.45 versus -$0.37).
- 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, ACADIA PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- ACAD, with its very weak revenue results, has greatly underperformed against the industry average of 15.7%. Since the same quarter one year prior, revenues plummeted by 93.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- You can view the full ACADIA 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.