Pacira Pharmaceuticals (PCRX) Is Today's Dead Cat Bounce Stock

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

  • PCRX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $38.7 million.
  • PCRX has traded 99,472 shares today.
  • PCRX is up 3.1% today.
  • PCRX was down 6.7% yesterday.

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More details on PCRX:

Pacira Pharmaceuticals, Inc., a specialty pharmaceutical company, develops, commercializes, and manufactures pharmaceutical products primarily for use in hospitals and ambulatory surgery centers worldwide. Currently there are 6 analysts that rate Pacira Pharmaceuticals a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Pacira Pharmaceuticals has been 481,200 shares per day over the past 30 days. Pacira has a market cap of $2.3 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.31 and a short float of 20.4% with 6.93 days to cover. Shares are up 12% 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 Pacira Pharmaceuticals as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk and disappointing return on equity.

Highlights from the ratings report include:
  • The debt-to-equity ratio is very high at 2.43 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, PCRX maintains a poor quick ratio of 0.72, which illustrates the inability to avoid short-term cash problems.
  • 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 Pharmaceuticals industry and the overall market, PACIRA PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • PACIRA PHARMACEUTICALS INC has improved earnings per share by 28.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PACIRA PHARMACEUTICALS INC reported poor results of -$1.93 versus -$1.73 in the prior year. This year, the market expects an improvement in earnings (-$0.32 versus -$1.93).
  • The gross profit margin for PACIRA PHARMACEUTICALS INC is rather high; currently it is at 50.32%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -35.62% is in-line with the industry average.
  • Net operating cash flow has significantly increased by 70.34% to -$6.28 million when compared to the same quarter last year. In addition, PACIRA PHARMACEUTICALS INC has also vastly surpassed the industry average cash flow growth rate of 11.22%.

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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